Potential Indirect Economic Impacts and Benefits 

Associated with Guidance Clarifying the Scope of 

Clean Water Act Jurisdiction 

U.S. Environmental Protection Agency 

April 27, 2011 

 
2 

Acknowledgements 

The U.S. Army Corps of Engineers contributed estimates of unit cost values for wetlands 

mitigation by state, a data base of aquatic resource records with associated jurisdictional 

determination status from ORM (FY 2009-2010), estimates of baseline mitigation, and an expert 

review analysis of the percentage of “other” waters that may become jurisdictional if 

implementing programs follow the proposed guidance. Corps staff also reviewed the cost 

estimate methodology, suggested perspectives for interpretation of cost estimate results, and 

contributed material on potential government costs. 
3 

I. Introduction

 

This preliminary economic analysis is intended to provide an estimate of the possible 

range of indirect impacts associated with implementing the proposed Guidance on Identifying 

Waters Protected by the Clean Water Act. 1 The proposed guidance itself is not binding: 

existing statutory and regulatory programs and requirements, such as the 402 and 404 permitting 

programs, impose costs and provide benefits. In addition, neither field staff nor courts are 

required to follow the guidance -- it is only to the extent that the non-binding guidance is 

followed that these indirect costs and benefits accrue. While this proposed guidance represents a 

reasonable interpretation of these requirements in light of the recent Supreme Court decisions, it 

may not apply to a particular situation depending on the circumstances. Nevertheless, the U.S. 

Environmental Protection Agency (EPA) has attempted to estimate these possible indirect costs 

and benefits associated with implementing the proposed guidance when compared to 

implementation of existing guidance.2

Among its many provisions, the Clean Water Act (CWA) establishes oil spill prevention 

programs (section 311); requires permits for pollutant discharges (section 402); requires permits 

for filling in wetlands or streams (section 404); calls for states to set standards for meeting water 

quality goals and develop plans to restore polluted waters (section 303); establishes state roles in 

approving federal permits (section 401); and allows the federal government, states, and 

communities to enforce the law. Any water found not to be a “water of the U.S.” generally is not 

protected by the Clean Water Act’s programs and strategies. 

In January 2001, the U.S. Supreme Court in Solid Waste Agency of Northern Cook 

County v. U.S. Army Corps of Engineers (SWANCC) held that intrastate, non-navigable, isolated 

waters could not be protected as “waters of the US” under the CWA based solely on the presence 

of migratory birds. Since SWANCC, no isolated waters have been declared jurisdictional by a 

federal agency. In June 2006, a split Supreme Court vacated and remanded judgments of the 

Sixth Circuit Court of Appeals in Rapanos v. United States. The pivotal opinions are those by 

the plurality (indicating that jurisdictional waters include “relatively permanent waters” and 

wetlands with a continuous surface connection to such waters) and by Justice Kennedy 

(indicating that waters are jurisdictional where they have a “significant nexus” to a traditional 

navigable water). The government position since Rapanos has been that a water is jurisdictional 

under the CWA when it meets either the plurality or Kennedy standard. 

The effect of the SWANCC decision is primarily on so-called “isolated” waters. These 

waters include vernal pools, prairie potholes and playa lakes—waters that lie entirely within a 

 

1 The proposed guidance clarifies and interprets requirements of the CWA and the agencies' implementing regulations in light of SWANCC and 

Rapanos and provides guidance on waters protected by the CWA. The CWA provisions and supporting regulations contain legally binding 

requirements. The guidance does not substitute for those provisions or regulations and is not itself a regulation. It does not impose legally 

binding requirements on EPA, the Corps, or the regulated community, and may not apply to a particular situation depending on the 

circumstances. Any decisions regarding a particular water will be based on the applicable statutes, regulations, and case law. The proposed 

guidance does represent a change in practice from existing guidance which did not make full use of the authority provided by the CWA to include 

waters within the scope of the Act, as interpreted by the Court. The agencies expect, based on relevant science and recent field experience, that 

the extent of waters over which the agencies will assert jurisdiction will increase compared to the extent of waters over which jurisdiction has 

been asserted under existing guidance, though not to the full extent that it was typically asserted prior to the Supreme Court's decisions. This 

economic analysis was developed to provide rough estimates of the range of possible indirect effects from a change in practice, but it is the 

statute, regulations and caselaw which determine the scope of CWA jurisdiction. 2 This particular baseline was deemed most useful for the purpose of comparing the potential outcome of proposed guidance.
single state and lack a direct, surface water connection to the river network. The effect of the 

Rapanos decision has been primarily on some small streams, rivers that flow for part of the year, 

and nearby wetlands. 

Current practice may be under-representing Clean Water Act jurisdiction. EPA and the 

Army Corps of Engineers (Corps) have prepared joint proposed guidance to clarify the 

regulatory definition of “waters of the United States” affecting all CWA programs. The 

proposed guidance would replace existing guidance documents on CWA jurisdiction. Any 

impacts examined that are associated with this proposed guidance are both indirect (because any 

impact would be as a result of actions of the CWA implementing programs) and contingent on 

parties following the guidance. To the extent that additional indirect costs are incurred, 

additional mitigation costs associated with CWA Section 404 are expected to be the largest 

category of such costs. 

 

EPA does not believe that much reduction in 402 permits has occurred as a result of 

SWANCC and Rapanos, and thus both costs and benefits of increased 402 permits are expected 

to be minimal. There are several potential explanations for this. The first is that EPA has 

delegated operation of the 402 permit program to most (46) states, and states apply jurisdiction to 

“waters of the state” which must be as inclusive as “waters of the U.S” but may be more 

inclusive. In contrast, only two states have assumed the 404 program (to the extent it can be 

assumed for “non-navigable” waters). It is also possible that a permitted discharger may have 

the effect of creating a permanent water where there once was an intermittent or ephemeral water 

because of continuous discharge (i.e., an “effluent dependent” or “effluent dominated” water). 

In these cases, jurisdiction may not come under question. Additionally, facilities may have 

invested the capital in treatment and simply be willing to continue operating under their permit 

and see no need to challenge jurisdiction. 

 

4 
5 

II. Assessing Potential Indirect Costs 

Economic analyses examine the differences between a baseline, the “world without the 

action taken”, and the “world with the result of the action taken” (i.e., assuming the guidance 

would be followed in regulatory decisions). Analyses of costs are applied to the incremental 

change between the baseline and the effect of the action. EPA typically conducts such an 

economic assessment in conjunction with proposed rules, and is providing a general assessment 

of potential indirect economic impacts of the proposed guidance to help inform decision-makers 

and the public. This analysis is based on the 2009-2010 period of time, after issuance of the 

most recent guidance interpreting the SWANCC and Rapanos Supreme Court decisions. 

To the extent costs would be incurred, the majority of such costs would result from 

permitting costs and mitigation expenses incurred by entities seeking CWA 404 permits. These 

indirect costs may include wetlands mitigation, stream mitigation, and project re-design and 

relocation expenses. In addition, to the extent the guidance is followed, there would be program 

management, training, and associated environmental compliance costs to government associated 

with administering the CWA. For example, the Corps would process permit requests, conduct 

jurisdictional determinations (JDs) if needed, manage data, coordinate with federal and state 

resource agencies, and determine compensatory mitigation needs. There would be costs 

associated with these additional actions. This rough estimate is intended to identify the potential 

order of magnitude of potential indirect cost impacts to the regulated community and 

implementing agencies. 

Two estimates are presented to represent potential incremental indirect costs on an annual 

basis. Each estimate shares a common baseline of 53,0003

 acres of wetland mitigation and 530 

miles of stream mitigation to represent activity in the baseline period. This baseline level of 

mitigation was apportioned to each state, in proportion to the number of positive jurisdictional 

determination (JD) status4

 records (FY2009-10) for wetland aquatic resources. 

To estimate state-specific per-acre costs of wetland mitigation and per linear foot 

estimates of stream mitigation, the Corps examined published studies and survey results, made 

phone inquiries to Corps Districts and mitigation banks, and researched web sites. A team of 

Corps experts came to agreement on a range of values for each state. For this analysis, the 

midpoint of this range was also used. The “high” of this range represents the most expensive 

mitigation found for each state. The midpoint likely represents more of a high-end value because 

for a majority of projects, costs are expected to be in the lower half of the range.5

 Thus, EPA 

 

3

 Based on approximately 44,000 acres of permittee responsible mitigation documented in the ORM2 data base in 

FY2010, approximately 7,000 acres of bank mitigation documented in the RIBITS data base in FY2009, and 2,000 

of in-lieu fee (ILF) mitigation estimated from the ratio of ORM entries for banks (26%) and ILF (7%) in FY2010. 

This total may be incomplete, but it is consistent with the level of mitigation the Corps has estimated for the past 10-

15 years, for example as presented in the 2008 Compensatory Mitigation Rule economic analysis. 

4

 For this report, JDs mean the jurisdictional authority decision (Y/N) entered for all aquatic resource (AR) types in 

the ORM2 database. It does not represent the number of Corps JDs completed and provided to applicants that are 

reported in various annual reports. There may be multiple ARs associated with a JD. 

5

 This is based on the judgment of the team that examined the range of per acre cost estimates; the primary intent 

was to identify the range, yet most of the costs would be anticipated to be in the lower half of the range. 
6 

and the Corps consider cost estimates based on the low to mid range to be most representative of 

actual costs in the aggregate. 

Each estimate represents a different incremental amount of acres and stream miles 

mitigated. The increment is determined using data records (FY2009-10) of Corps jurisdictional 

status decisions associated with various aquatic resource types: “isolated waters” (a term used in 

ORM2 data base to represent intrastate, non-navigable, waters that lack a direct surface 

connection to other waterways; consistent with the usage in the proposed guidance, these waters 

are hereafter referred to as “other waters”), relatively permanent waters, traditional navigable 

waters, non-relatively permanent waters, and wetlands associated with these categories. The 

method assumes that all permits associated with projected additional jurisdictional waters would 

require mitigation at the same rate as baseline jurisdictional waters. The estimates build upon 

one other, with estimate 1 representing only the changes that may result from application of the 

proposed guidance to waters not in the “other waters” category and estimate 2 representing an 

additional increment from applying the proposed guidance to the “other waters” category. 

estimate 2 represents the best estimate of changes that may result from application of the 

proposed guidance. The difference between estimate 1 and estimate 2 helps show the potential 

impact of applying the guidance to “other waters” and highlights the uncertainty in knowing 

precisely how many of these waters would be considered jurisdictional if the new guidance is 

implemented. The full results of this analysis are presented in Appendix A. 

Estimate 1- “Significant Nexus Test” Waters

In estimate 1, it is assumed that all negative JDs for aquatic resources not in the “other 

waters” category are instead determined to be jurisdictional. For example, some wetlands 

adjacent to relatively permanent waters or associated with non-relatively permanent waters are 

associated with a negative JD in the ORM data base (FY 2009-2010). In estimate 1, it is 

assumed that these negative JDs would be determined to be jurisdictional. The level of 

incremental wetland acres mitigated is calculated in proportion to the subsequent percent 

increase in wetlands that are assumed to be determined jurisdictional.6

 Nationally, 1.5 percent of 

JDs are negative for non-isolated wetlands. 7 The increase in jurisdictional wetlands corresponds 

to an estimated increase of 803 acres of wetland mitigation (a 1.5 percent increase from the 

baseline of 53,000 acres of estimated wetlands mitigation per year under current guidance). 

All streams in the non-relatively permanent water, relatively permanent water, and 

traditionally navigable water categories were assumed to be determined to be jurisdictional in 

this estimate. On the national level, 2 percent of records in these categories of streams are 

associated with negative JDs in ORM data from FY2009-20108

. Assuming these are determined 

to be jurisdictional, and applying stream mitigation to the same extent as associated with the 

jurisdictional streams in FY2009-2010, this results in 9.3 miles of additional stream mitigation (a 

 

6

 The formula used to make this calculation is presented in Appendix A. 

7

 Percent is calculated by taking the number of “no” responses for aquatic resource (AR) jurisdictional authority for 

wetlands adjacent to non-RPWs, wetlands abutting and adjacent to (not abutting) RPWs, and wetlands adjacent to 

TNWs, and dividing by the total of all of these AR types. 

8

 For streams, the percent is calculated by taking the total number of “no” responses for non-RPWs, RPWs, TNWs, 

and combinations of both non-RPWs and RPWs, and dividing by the total for these types. 
2 percent increase from baseline of 530 miles of estimated stream mitigation per year under 

current guidance). In estimate 1, no other waters are assumed to be determined jurisdictional. 

Estimate 2 – “Significant Nexus Test” Waters +17% of Other Waters

Estimate 2 includes the incremental increase in mitigation (acres of wetlands and miles of 

streams) calculated in estimate 1, and adds additional acres of wetland mitigation assuming 17 

percent of aquatic resource records in the “other waters” category from ORM FY2009-2010 data 

are determined to be jurisdictional. These “other waters” comprise less than 5 percent of all 

aquatic resource records in the ORM data base (FY 2009-2010). EPA and the Corps assumed all 

waters in this “other waters” category are non-jurisdictional in the baseline. Additional acres of 

wetland mitigation are added proportionally by state based on the number of “other water” 

records associated with JDs in each state. The increase in wetlands that are assumed to be 

jurisdictional corresponds to an estimated increase of 2,517 acres of wetland mitigation (a 5.0 

percent increase from baseline), including the 803 acres for “significant nexus test waters” in 

estimate 1. The 9.3 miles of additional stream mitigation for “significant nexus test” waters from 

estimate 1 are also included in estimate 2. 

To select a percent increase in other waters for this estimate, a team of Corps experts 

examined a sample of 262 project files previously coordinated with Corps headquarters from 

June 2008 – January 2011, representing over 1,000 individual waters in 30 states. Based on data 

available in record files, the team judged whether or not the Agencies would determine the 

waters to be jurisdictional using the new proposed guidance. Overall, the team found that 17 

percent of these other waters would be determined to be jurisdictional using the new proposed 

guidance.9

 Additional details on the methods and results of this analysis are presented in 

Appendix B. An EPA team independently examined a sub-sample of 50 JD project files and 

similarly estimated that 15 percent of those other waters would become jurisdictional. Of the 

other waters examined by the Corps, 73 percent were wetlands, and the remaining waters were 

ponds, streams, or other resource types. To be conservative for this analysis, EPA assumed that 

wetlands mitigation would be required for all other waters determined to be jurisdictional. EPA 

further assumed the amount of mitigation per jurisdictional decision on these other waters would 

be to the same extent as jurisdictional wetlands in FY2009-2010. 

It is also possible that impacts are currently occurring without going through the JD 

process at all. Landowners and developers could be assuming that waters on their property are 

non-jurisdictional and not request a JD or engage in the permitting process, and thus not be 

represented in the ORM 2009-2010 data base. While such landowners might continue to assume 

that their waters are not jurisdictional, some may request a JD from the Corps or otherwise have 

their waters determined jurisdictional as a result of implementation of this guidance. To account 

for this contingency, mitigation costs were increased an additional 10 percent to calculate the 

 

 

9

 The analysis indicated than none of the 145 waters examined in the state of California would become 

jurisdictional. As a result, an alternative percent increase was assigned for CA mitigation increase. Rather than 

apply a 0 percent increase, 5 percent was selected as a conservative estimate. 

7 
8 

total cost estimate for each scenario.10 To the extent unknown impacts are occurring and to the 

extent that these activities would be subject to permitting, the amount of mitigation potentially 

required would be reduced by efforts to avoid and minimize impacts, which are the first steps in 

the 404 process. 

Estimate 1 Low Mid High

Wetland Mitigation Costs $19,604,617 $38,551,811 $57,499,006

Stream Mitigation Costs $8,690,922 $12,983,640 $17,276,358

Additions for Impacts w/o JDs $2,829,554 $5,153,545 $7,477,536

Total Mitigation Cost: $31,125,093 $56,688,996 $82,252,900

Estimate 2 Low Mid High

Wetland Mitigation Costs $62,901,417 $123,863,396 $184,825,374

Stream Mitigation Costs $8,690,922 $12,983,640 $17,276,358

Additions for Impacts w/o JDs $7,159,234 $13,684,704 $20,210,173

Total Mitigation Cost: $78,751,573 $150,531,739 $222,311,906

$‐

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Low Mid High Low Mid High

Estimate 1 Estimate 2

Figure 1.  Preliminary Estimate of Incremental

Indirect Annual 404 Mitigation Costs

Additions for Impacts w/o JDs

Stream Mitigation Costs

Wetland Mitigation Costs

 

10 Some stakeholders assert there is a substantial amount of impacts to waters that project proponents believe are 

beyond the scope of CWA under current post-SWANCC and Rapanos policies. While not possible to quantify 

absent a major independent study, informed observers conclude some level of impacts to waters for which JDs are 

not now being requested is likely. Without an ability to specifically estimate the degree, yet to avoid a systematic 

source of error, the cost analysis assumes a 10 percent increase in the number of JDs. This provides a reasonably 

safe margin to capture these difficult to quantify impacts. 
9 

Summary of Mitigation Cost Estimates 

Overall, the best representation of potential indirect mitigation costs is the low-mid range 

of estimate 2: $79-$151 million. This suggests a small increase (approximately 4%) in 

proportion to the current baseline estimate of between $2.1 and $3.9 billion. The baseline cost 

range is calculated by summing the products of the low and mid-range unit cost estimate for each 

state multiplied by the baseline mitigation apportioned to each state. The total estimated baseline 

mitigation is 53,000 wetland acres and 530 stream miles. Detailed results of this analysis are in 

Appendix A. In addition, the amount of incremental acres mitigated is within the range of interannual variability based on Corps estimates over the past 10-15 years. 

Administrative Costs 

It is also important to address governmental costs that may be incurred in managing the 

program and administrative costs to permit applicants. The following discussion focuses on the 

costs to the federal government of administering the CWA 404 program, but it is important to 

note that states and tribes may also incur additional costs as part of the CWA Section 401 

certification process. 

 Additional Federal agency costs may result from additional jurisdictional determination 

(JD) requests. The increase in waters determined by the agencies to be jurisdictional from the 

2008 guidance may result in an increase in requests for JDs. Some changes contained in the 

proposed guidance, such as the expectation that tributaries of specified physical characteristics 

will generally satisfy the significant nexus test, have the potential to reduce the administrative 

costs of establishing jurisdiction. If such changes balance the expected increase in JD requests, 

no incremental administrative costs would occur. Alternatively, administrative costs could either 

increase or decrease.11 The Corps expects that more waters determined to be jurisdictional by 

the agencies will lead to an increase in permit applications and JD documentation. This, in turn, 

will increase the need for required consultations under the Endangered Species Act (ESA) and 

section 106 of the National Historic Preservation Act. This could increase costs for other federal 

agencies, such as the Fish and Wildlife Service. There may also be an increase in enforcement 

situations, potentially increasing the after-the-fact permit workload. 

In addition to the number of permit applications, the complexity of permit applications 

may increase. A greater abundance of waters determined by the agencies to be jurisdictional on 

a project site may reduce the ability to avoid or minimize impacts. As a result, there may be a 

larger scope of analysis. The increase in waters on a site may increase impacts such that an 

individual permit is required rather than general permit coverage, or that an Environmental 

Impact Statement (EIS) is required in some cases. The increase in waters at a site could also 

result in increases in the amount of mitigation required. 

The Corps expects that applicants will continue to use “preliminary JDs” (PJDs), 

whereby a permit applicant elects to set aside the jurisdictional question, and voluntarily “opts 

in” to the permitting process because it can be faster in terms of the permit evaluation process. 

Because most non-isolated waters are expected to be jurisdictional following the proposed 

 

11 Further analysis and deliberation may inform any future quantitative assessment of these administrative costs. 
guidance, PJDs may continue to be an attractive option for applicants to avoid a longer 

“approved JD” (AJD) process. In FY 2010, 58 percent of JDs were PJDs (42 percent were 

AJDs). PJDs are less time-consuming to document than AJDs, but application processing may 

require more information describing jurisdictional waters (e.g., to assess impacts and formulate 

compensatory mitigation requirements). Alternatively, some applicants may request an AJD as a 

means to potentially reduce mitigation requirements and associated costs. If more landowners 

elect to request AJDs, the workload and administrative costs will increase. 

An additional effect on costs is that many AJDs may become easier to document on the 

one hand, but some may become more costly and time consuming on the other (because of the 

larger potential scope). The agencies are likely to determine more waters to be traditionally 

navigable waters (TNWs), so those TNWs and their adjacent wetlands will be jurisdictional 

without the need for significant nexus (SN) evaluation, and the distance to the nearest TNW will 

be shorter for many waters. The larger watershed scale for SN evaluations, coupled with the 

broader interpretation of significant functions, will make SN determinations less timeconsuming. Furthermore, once a SN has been demonstrated in a watershed, future JDs in that 

watershed may be able to incorporate or reference it, rather than requiring the Corps to conduct 

an entirely new analysis. There may also be an increase in appeals of AJDs. However, the 

increased clarity of the proposed guidance may mean more appeals are able to be resolved 

expeditiously. 

The Corps estimates the costs incurred by both the Corps and applicants (excluding costs 

for compensatory mitigation) to range between approximately $7,900,000 and $20,000,000. The 

estimates are based on noting the incremental increase in workload associated with implementing 

the proposed guidance, and applying low end and high end cost estimates to applicants based on 

previous cost determinations. 12 These totals are comprised of a $4,800,000 to $8,700,000 in 

Corps costs (incremental increase in workload related tasks, low and high end estimates for HQ 

review of more JDs and additional time to conduct a SN for isolated waters) and a range of 

$3,100,000 to $11,300,000 in applicant costs (not including compensatory mitigation costs) for 

permit and JD associated costs. If these costs are added to the mitigation cost estimate range of 

$79-151 million per year previously presented, the result is $87-171 million per year. 

 

 

12 Costs to the Corps were determined by applying an incremental increase to certain baseline task hour formulas 

used in the current budget allocation process. Costs to applicants were determined using "Cost Analysis for the 

2000 Issuance and Modification of Nationwide Permits" (IWR unpublished draft report, 2001}. The 2001 report 

estimates were based on data and information gathered in informal interviews with wetland permitting consultants 

and Corps district regulatory staff. The unit costs estimated for the different permit types were presented in a low to 

high range. While 10 years has passed since that report, the likely increases in costs are presumed to within an order 

of magnitude for the purpose of this cost estimate and consistent with other levels of uncertainty for this analysis. 

Direct costs to permit applicants, excluding compensatory mitigation costs, can be broken out into several 

application components: (1) delineation and survey of special aquatic sites; (2) project/impact drawings; (3) 

alternatives analysis; (4) preparation of the compensatory mitigation proposal; and (5) application submission. 

Costs for each of these can vary widely and in terms of order of magnitude among the components for different 

permit types. 

10 
11 

III. Assessing Potential Indirect Benefits 

Although costs are a very important component of any economic analysis, equally 

important is the value of the benefits received. Failure to account for the full economic values of 

ecosystems could result from a lack of recognition of benefits that 1) may not be adequately 

captured by traditional market valuation techniques, 2) may be public goods13 that are not subject 

to any valuation reporting, or 3) may be intangible by their nature (these categories are not 

mutually exclusive). A common concern is that Agencies might not effectively manage what 

they do not measure, and they might undervalue resources that are not identified or quantified. 

Valid procedures for estimation of economic benefits are described in EPA’s Guidelines 

for Preparing Economic Analyses (2011). Many of the procedures from the Guidelines could be 

applied to estimating the benefits of following the proposed guidance. However, there are 

several difficulties to briefly mention. One is that the benefits of water quality improvement are 

generally spread diffusely over large populations. It is difficult to quantify the generally small 

benefits enjoyed by generally large numbers of people and aggregate up to a meaningful overall 

number. More importantly, the great majority of benefits from water quality improvements are 

typically public goods – things that cannot be bought and sold in markets – and so must be 

estimated by indirect means rather than observed in market prices. The Guidelines anticipate 

this possibility, and note several things. First, the fact that values are not easily estimated does 

not mean that they do not exist, nor even that they are small. Second, when it is not possible to 

monetize benefits – that is, to express them in dollar terms – it may still be useful to present 

whatever quantitative physical, chemical, or biological information is available. 

A. Categories of Benefits 

One category of benefits includes goods and services that are generated by a proposed 

action or activity. Although potentially easier to identify than other categories, these benefits 

may or may not be easy to measure or ascribe value. In terms of protecting small streams and 

wetlands, an example benefit might be the support of fish and shellfish populations in 

downstream waters as well as protection of the waters themselves. These types of waters 

provide habitat for a robust and diverse assemblage of organisms that are necessary to support 

the whole aquatic community structure and ecological function. Some associated attributes may 

have market value (such as the fish themselves) and some may have non-market value (such as 

biodiversity). 

A related economic impact is the stream of revenues that are supported by the action 

taken. These are activities that may increase in occurrence and value as a resource is protected, 

or that may decrease in value or not happen at all if the resource is not protected. Provisioning of 

water supply for manufacturing, energy generation, and agriculture is an example of a benefit 

that may be affected. Tourism is perhaps the best example of this type of benefit. It is often the 

natural beauty or recreational opportunities provided by nature that spur the investment and 

revenue generated by tourism. The revenue streams supported include not just fees for the 

 

13 A public good is a good that is non-rival (my enjoyment of clean water does not prevent you from enjoying it as 

well) and nonexclusive (when water is cleaned so that I may enjoy, it is also available for you to enjoy). 
12 

recreational activity itself, but also the hotels, restaurants, and other support services provided. 

The multi-billion dollar sport fishing industry is an example of a revenue stream supported by 

small streams and wetlands. It is essential to distinguish the marginal or incremental 

contribution of environmental factors to such values. For example, the value of a hotel is not, in 

general, entirely attributable to the environmental conditions of its locale. 

 Another category of benefits are costs avoided. Costs avoided represent what you don’t 

have to pay because of the action you have taken. An ecosystem function that has an effect of 

resulting in “costs avoided” is floodplain preservation and avoidance of more frequent or severe 

flooding due to failure to preserve floodplains. Although dams and levees are built to control 

potential flooding, much of the alteration of the natural hydrologic regime has contributed to the 

potential for flooding. Small streams and wetlands serve to store water and slow down its 

movement across the landscape. When these systems no longer perform this function, the 

potential losses from flooding may increase 

Protection of small streams and wetlands may be an effective “insurance policy” when 

considering the flooding losses already manifested and the potential magnitude of losses in the 

future if a great deal more of these small stream and wetland systems are lost without appropriate 

mitigation. These gains in avoided costs would not only apply to individuals directly affected by 

a flood, but also to society as a whole because everyone ultimately pays the price of lost 

revenues and lost investment to fellow members in some way. For example, where people are 

insured or governments compensate for losses, the insurance company could raise premiums, 

lose shareholder value, or reduce investments or the government could reduce services, incur 

debt, or have to find revenue to cover expenses from other sources. 

 1. Ecosystem Services and Public Welfare 

The term “ecosystem services” refers to the many natural processes by which 

ecosystems, and the species they include, sustain and fulfill human life.14 In other words, 

ecosystem services are the direct or indirect contributions that ecosystems make to the wellbeing of human populations.15 Protection of these waters is important for public health, safety, 

and quality of life. Pollution or destruction of these waterways can affect drinking water, places 

where people recreate, the fish and shellfish people eat, the irrigation water used on food crops, 

and how floods affect people and property. About 60% of streams are intermittent or ephemeral 

and they contribute to water supplies that provide, at least in part, drinking water for 117 million 

people. While a substantial majority of these intermittent and ephemeral streams are already 

being found jurisdictional under current guidance, those that are currently not being found 

jurisdictional may be found to be so under the proposed guidance. Small streams and wetlands 

also provide habitat and biodiversity, support recreational fishing and hunting, filter sediment 

and contaminants, reduce flooding, stabilize shorelines and prevent erosion, recharge ground 

water, and maintain biogeochemical cycling. Estimates of fishing and hunting expenditures, 

major flood losses, and the value of wetlands for storm protection services all total in the tens of 

billions of dollars per year. In any economic valuation exercise, the incremental portion of these 

 

14 Daily, G. (1997) Nature’s services: Societal dependence on natural ecosystems. Island Press: Washington D.C. 15 U.S. EPA (2009) Valuing the Protection of Ecological Systems and Services: A Report of the EPA Science 

Advisory Board. EPA-SAB-09-012. 
13 

values attributable to the incremental number of small streams and wetlands protected by 

implementing the new proposed guidance versus the previous guidance would have to be taken 

into account. Appendix C of this document provides additional details on specific ecosystem 

services. 

 

 2. Administrative Cost Savings to Government 

The federal government and states are currently spending significant resources on siteby-site evaluations of jurisdiction against a standard that is unclear and somewhat ambiguous. 

This represents an investment of resources that could be put to other use (and may in fact be 

needed to process additional 404 permits) if the decision criteria were more clearly articulated. 

While potentially incurring additional costs to process additional permits, and potentially having 

a short-term backlog of actions as the federal government transitions to implementing new 

guidance, the proposed guidance may reduce some permitting costs and speed the permit review 

process in the long-term by clarifying jurisdictional matters that have been time-consuming and 

confusing for field staff and the regulated community. The effect of the two Supreme Court 

cases and subsequent guidance has, in some circumstances, required agency staff to spend 

limited resources to understand and apply complex jurisdictional standards. The uncertainty 

surrounding jurisdictional questions has increased the paperwork, costs, and time associated with 

jurisdictional determinations. However, any cost savings will be at least partially offset by 

increases in mitigation planning and implementation costs, associated environmental compliance 

for larger permit areas, and additional documentation and data management requirements. 

 3. Prevention, Enforcement, and Cleanup Facilitation 

The U.S. government is shifting enforcement priorities away from waters where 

jurisdiction is a potential issue because of the uncertainty in realizing the benefits. Because of 

difficulties establishing where the CWA applies after the Supreme Court’s decisions in SWANCC

in 2001 and Rapanos in 2006, EPA enforcement managers have indicated that enforcement 

efforts are shifting from protecting small streams high in the watershed and instead are moving 

down river. In short, EPA is focusing efforts on larger streams and rivers, where there is more 

certainty of establishing jurisdiction. Guidance to more clearly identify and protect small 

streams and wetlands may ultimately save the costs of additional drinking water filtration, stream 

restoration, and other costs of repairing damage caused by pollution. CWA jurisdiction is 

necessary to apply CWA programs, including water pollution protection, oil spill prevention and 

response, and protection of streams, rivers, lakes, and wetlands. 

 4. Certainty in Business Investment and Planning 

Land developers and other businesses face uncertainty surrounding the jurisdiction 

question that may lead to reduced willingness to invest in projects or lost investment when 

project plans must be altered or abandoned. Businesses operate best in an environment of 

regulatory certainty. Business professionals are equipped to plan accordingly for known factors. 

However, uncertainty can lead businesses to sit on capital rather than take unknown risks. The 

current lack of clarity in where the CWA applies can delay building roads and houses, 

developing natural resources, and engaging in other activities where CWA 404 permits are 
14 

needed. Guidance to more clearly identify and protect small streams and wetlands that require 

protection under the CWA may reduce uncertainty and the costs that go with it. As noted in the 

discussion of costs, permit applicant costs associated with the new guidance are estimated to be 

between $3 and $11 million. Depending on how significant costs related to uncertainty prove to 

be, the proposed guidance might ultimately reduce net costs for people seeking CWA permits, 

and increase consistency, predictability, and timeliness of the permitting process. 

B. Example Valuation of Benefits 

 The benefits calculated in a cost-benefit analysis are a monetized measure of the societal 

gains realized from adoption of a proposed policy relative to those that would have been realized 

in the absence of the policy. Such gains are always calculated as an increment to a baseline 

describing what would have happened if the policy had not been adopted. It is essential to bear 

this in mind when reviewing aggregate statistics. Intermittent or ephemeral streams contribute to 

the drinking water supplies consumed by 117 million Americans. Freshwater anglers spent over 

$25 billion on trips and equipment in 2006, and almost two and a half million Americans hunted 

migratory birds. However, absent a determination of how much water quality would change in 

areas affected by the proposed guidance, these values cannot be used to adduce monetary 

benefits. 

 In addition to confining analysis to the incremental effects of proposed policy changes, 

benefit estimation also requires careful evaluation and categorization of expenditures. The $25 

billion spent on fishing trips and equipment is not itself an estimate of value; consumer value is 

typically measured not by what consumers spend on something, but by the excess of what they 

would be willing to spend over what they actually do spend. As the former is typically not 

directly observed, inferring consumer willingness to pay from observed data often requires 

drawing some subtle inferences. 

 One way to attempt an estimate of potential incremental indirect benefits is to examine 

studies of ecosystem services that report a monetized value on a per unit basis, such as a dollar 

value per wetland acre, or a dollar value per wetland acre per year. For this exercise, it is 

necessary to express values on a “per acre” basis rather than a “per acre per year” basis to be 

comparable to the cost figures presented in section IV. The cost figures are annual values, but 

they reflect an annual summation of one-time compensatory mitigation costs. These “unit costs” 

are established as the one-time cost per acre to maintain the services provided in perpetuity. 

Thus, a proper comparison would be to derive marginal benefits as the product of the estimated 

marginal number of acres affected each year and a “unit benefit” dollar value per acre. Dollar 

values expressed as “per acre per year” can be converted to a present value dollar value “per 

acre” by dividing by a discount rate (typically between 3 percent and 7 percent). 

 Researchers have published a great deal of studies on the values of ecosystem services 

provided by wetlands, and these studies offer the most readily available basis for comparison to 

potential costs. Appendix D provides a literature review of potentially relevant studies. 

Estimation of benefits varies widely and suffers from incomplete knowledge of factors affecting 

the total value. Wetlands vary greatly in their functionality and relative value based on their 

relative scarcity, location within a watershed, and the degree of human impacts in their vicinity. 
15 

As such, estimates of their worth can vary by several orders of magnitude. The following are 

important points to keep in mind when considering these indirect benefit estimates: 

• Not all wetlands provide all the service categories examined in the literature. In addition, 

the relative value of each type of service varies from wetland to wetland. For some, the 

value for flood protection may be the greatest benefit, whereas for others the value of 

habitat provisioning may be greatest. 

• Variability in benefit estimates may reflect flaws in the estimation methods, incomplete 

knowledge of survey responders or the source of the estimate, or real variation in the 

physical attributes and their associated values.16

• Values published in the literature may have a selection bias, where wetlands are chosen 

for study because they have a perceived value.17

• Limitations on determining “willingness to pay” include that most wetland services are 

not traded in markets and their value cannot be revealed, people may not be aware of all 

their services and unable to express how much they would be willing to pay if they were, 

estimates based on “replacement costs” do not necessarily reflect an actual willingness to 

pay that amount, and it may not be possible to trace and measure the value of all the 

myriad services that a wetland provides.18 

• The relative value of wetland depends in part on relative scarcity within its watershed and 

the degree of human impact on the watershed. In general, a temperate-zone watershed 

should optimally have between 3 and 7 percent of its area covered by wetlands to provide 

adequate services. 19 A wetland’s value will likely reflect the extent to which it is “in 

excess” or very scarce. However, as a landscape becomes highly modified and a wetland 

is small, fragmented and cut off from other waters, its value diminishes rapidly because it 

can no longer provide any of the valued services regardless of its relative scarcity.20

The overall message is that determining the precise value of a particular wetland is very sitespecific exercise, and one that poses many challenges. 

 Most published studies tend to examine a portion of the services provided by a wetland. 

A few have undertaken a holistic assessment, although they are still considered incomplete by 

their authors. One synthesis study21 presents average wetland function values for a fairly 

comprehensive set of categories. While these authors do not present an aggregate, the following 

examination of data presented in this paper yields the following composite: 

 

 

16 Heimlich, R.E., R. Claassen, K.D. Wiebe, D. Gadsby, and R.M. House. 1998. Wetlands and Agriculture: Private 

Interests and Public Benefits. AER-765, U.S. Dept. Agr. Econ. Res. Serv., Aug. 17 Brouwer et al. (1999). “A meta-analysis of wetland valuation studies.” Regional Environmental Change (1): 47-

57.. 

18 King, Dennis. The Dollar Value of Wetlands: Trap Set, Bait Taken, Don’t Swallow. 1998. National Wetlands 

Newsletter, vol 20, no 4. 

19 Mitsch and Gosselink. Ecological Economics 35 (2000) 25-33. 

20 Mitsch and Gosselink. Ecological Economics 35 (2000) 25-33. 

21 Heimlich, R.E., R. Claassen, K.D. Wiebe, D. Gadsby, and R.M. House. 1998. Wetlands and Agriculture: Private 

Interests and Public Benefits. AER-765, U.S. Dept. Agr. Econ. Res. Serv., Aug. 
16 

Heimlich et al data (6% discount over 50 years in 1992$)

Mean Low High Location

market fish

AVERAGE

                              7                              7                               7 FL

                            22                            16                            30 FL

                         547                         547                          547 LA

                         702                         651                          702 LA

                      1,205                            35                       4,372 VA

                      1,259                      1,259                      1,259 FL

                      1,390                         696                       2,783 MI

                    43,928                    43,928                    43,928 Australia

                      6,133                      5,892                       6,704 ALL

market fur                          137                            13                          261 US, LA

nonmarket nonuser habitat

AVERAGE

                         115                            88                          154 Scotland

                    15,956                    10,079                     21,857 Austria

                    49,850                    31,489                     68,386 Austria

                    68,055                    42,989                     93,223 Austria

                  133,860                    84,558                  183,366 Austria

                      1,248                         865                       1,632 Canada

                      2,850                      1,165                       4,536 NE

                    14,916                      7,487                     22,345 NE

                      1,155                      1,155                      1,155 New England

                    52,848                    24,679                     80,532 Kentucky

                  309,511                  250,459                  382,816 CA

                  347,548                  325,394                  371,087 CA

                    83,159                    65,034                  102,591 ALL

fishing

AVERAGE

                            95                            95                            95 LA

                         356                         356                          356 LA

                         273                         224                          323 MI

                         362                         280                          444 MA

                         942                         942                          942 Canada

                    15,126                      3,725                     26,528 FL

                    28,845                    14,413                     43,257 MI

                      6,571                      2,862                     10,278 ALL

hunting                       1,019                      1,019                       1,019 US/Can

recreation                       1,139                      1,139                       1,139 US

filtering                       3,965                      2,428                       5,501 Cornbelt

flood control                     35,075                      3,916                     66,233 MA

scenic                       2,722                      2,722                       2,722 US

ALL (1992$)                   133,348                    82,163                  186,169

2010 $                   209,356                  128,996                  292,286

*Numbers in bold represent mean values reported in Heimlich et al applied to both low and high columns
17 

Existing studies offer a basis for a first order approximation of partial potential indirect 

benefits of implementing the new proposed guidance based on an average composite value and a 

range inferred from selected literature values. While there may be some overlap in these 

categories, adding up the categories from Heimlich et al yields a rough “unit benefit” range from 

$129,000-$292,000 ($2010). This total “unit benefit” above is comparable to the wetland value 

($148,000 in 2010$ at a 6 percent discount rate) reported in another synthesis study.22 

This unit benefit estimate can be applied to the potential incremental number of wetland 

mitigation acres (i.e., 803 acres for estimate 1 and 2,517 acres for estimate 2) to estimate 

potential indirect benefits (see Figure 2). Because the unit benefit presumably applies to the preproject wetlands that will be impacted at the site, and typically more mitigation acreage is 

required to compensate for a given amount of impacted acres, an assumed ratio of mitigation 

acres to impacted acres of 2:1 is applied for purposes of the benefit calculation. 23 This analysis 

suggests that the indirect benefits of increased coverage of wetlands under the CWA derived 

from implementation of this new guidance will exceed the indirect costs. Note that indirect 

benefits of incremental stream mitigation resulting from the proposed guidance are not 

considered. 

Potential Indirect Wetland Mitigation Costs

Estimate 1 Estimate 2

High $57,499,006 $184,825,374

Mid $38,551,811 $123,863,396

Low $19,604,617 $62,901,417

Potential Indirect Wetland Mitigation Benefits

Estimate 1 Estimate 2

High $117,352,718 $367,841,582

Mid $84,056,473 $263,474,650

Low $51,792,042 $162,341,929

 

22 Costanza et al., The value of the world’s ecosystem services and natural capital. Nature. Vol 387. 15 May 1997. 23 In other words, the “unit benefit” applies to the number of “impacted” acres not the number of “mitigation” acres, 

which is typically larger. So for estimate 2, for example, the 2,517 acres of projected new mitigation are adjusted 

downward by a factor of 2 to reflect the presumed number of impacted acres these are intended to compensate for. 

A 2:1 mitigated to impacted acre ratio may be a conservative assumption. A recent Ecosystem Marketplace study 

(2010) puts this ratio at approximately 5:4. Using a lower ratio would raise the benefits estimates because it would 

mean that the 2,517 acres of projected new mitigation correspond to a higher number of impacted acres. 
18 

$‐

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

Benefits Costs Benefits Costs

Estimate 1 Estimate 2

Figure 2.  Potential Wetlands Mitigation Indirect

Costs Compared to Potential Value of Indirect

Benefits Provided (annual basis)

High

Mid

Low

Because the circumstances of different wetlands and other areas that might be found 

jurisdictional under the proposed guidance vary so greatly from one locality to another, it is 

difficult to derive estimates of nationwide benefits of the proposed guidance. Economists are 

wary of benefits transfer in general, and of large scale benefits transfer without knowledge of 

how comparable situations are between where benefits are assessed and where they are applied 

in particular. Although the "unit benefit" aggregation avoids use of replacement cost studies and 

avoids double-counting to the best of our knowledge, it must be emphasized that values from 

many disparate locations and studies are combined and then applied to wholly distinct locations. 

This is indeed a speculative application and, as such, the accuracy and precision of results are 

highly uncertain. However, even considering this uncertainty, this analysis does suggest that 

benefits are likely to justify costs. 

 An alternative approach would be to look at states or regions for which some data are 

available and consider the relationship of benefits to costs by state or region. Examples for the 

handful of states/regions for which such information is available are presented below. A number 

of caveats should be kept in mind in interpreting this analysis, including: 

• It is difficult to link the types of wetlands and water bodies for which economic analyses 

have been conducted with the types likely to be found jurisdictional under the proposed 

guidance. For this reason, we need to take care in our inferences, e. g., fishery values to 
19 

waters that might or might not be instrumental in fish reproduction (and similarly for 

water purification, storm protection, etc.) 

• These examples should be regarded as illustrative, not dispositive. 

• The above and all other caveats notwithstanding, there is no existing study that estimates 

all of the benefits provided by potentially jurisdictional water bodies. Whatever other 

issues might arise in interpreting these examples, it should be remembered that estimates 

of benefits are necessarily incomplete. 

All values are in 2010 $/acre. Benefits accrue in perpetuity at a 5% discount rate. All estimates 

in this section are total (not annual) values per acre. The costs presented below are the statespecific mitigation cost estimates used in the cost estimate portion of this analysis (see Section II 

and Appendix A). They are provided here for comparison purposes; costs of mitigation were not 

estimated by the various study authors, whose focus was rather on estimating benefits. 

Example 1: Coastal wetlands of Louisiana 

A couple of studies have estimated the benefits of wetlands along the Louisiana coast. In 1987 

Stephen Farber and Robert Costanza estimated the value of recreational and storm protection 

services of coastal wetlands. In 1996 Farber conducted another study of the region, which was 

also informed by his 1989 storm protection study. The 1987 Farber and Costanza and the 1996 

Farber papers differ by about a factor of five in their estimates of value, but this difference is 

almost entirely explained by the more robust estimate of storm protection values in the later 

study. The results of the later study have also been buttressed by subsequent work on storm 

protection services of coastal wetlands (Costanza, et al. 2008). 

Low estimate High estimate Low estimate High estimate 

of benefits of benefits of costs of costs 

$2,465 $19,704 $15,000 $50,000 

In this case only the higher estimate of benefits exceeds the lower estimate of costs, although the 

caveat above that benefit estimates are necessarily incomplete should always be borne in mind. 

Example 2: Wetlands in the “cornbelt” 

In 1997 Poor presented a paper on the value of wetlands in Nebraska. Three years later Lant and 

Richards published a paper on wetlands in the “cornbelt”. Poor focused on nonuse values of 

wildlife, Lant and Richards on water quality and recreation. 

Low estimate of benefits High estimate of benefits Cost 

$18,967 $42,892 $15,000 
20 

The low and high benefit estimates differ in which of the benefit estimates from the Poor study 

are included, as he cited a range. In either case, however, benefits exceed costs. 

Example 3: Florida coastal wetlands 

Lynne, et al. (1981), Fischer et al. (1989), and Bell (1989) have estimated the value of wetland 

contributions to commercial and recreational fisheries for the state of Florida. The low value 

estimate below comes from summing the lower of the non-overlapping values generated for 

commercial and recreational fisheries. The high value estimate comes from summing the higher 

values plus extrapolating storm protection services as estimated by Farber (1989) for the 

Louisiana coast, and nutrient retention services as estimated by Jenkins et al. (2008) for the 

Mississippi Alluvial Valley, to the coast of Florida. 

Low estimate High estimate Low estimate High estimate 

of benefits of benefits of costs of costs 

$30,007 $59,200 $35,000 $145,000 

The low estimate of benefits approaches that of the low estimate of costs, while the high estimate 

of benefits exceed the low estimate of costs. The high estimate of costs exceeds either estimate 

of benefits. Note that these estimates are based only on commercial and recreational fishing 

benefits. 

Example 4: Wetlands surrounding Lake St. Clair Michigan/Ontario 

Lake St. Clair is located near Detroit, MI. Its basin lies in both the state of Michigan and the 

Canadian province of Ontario. Studies of the benefits of its surrounding wetlands in the state of 

Michigan have been conducted by Amacher, et al. (1989), and by Van Vuren and Roy (1993). 

The latter study is used to generate the lower estimate of benefits. Amacher, et al. estimate 

almost $60,000 in fishery-related benefits to the U.S. wetlands. It is not clear if this would be 

indicative of the value of jurisdictional wetlands under the proposed guidance, as such waters 

may not support fisheries. At the same time, however, neither Amacher nor Van Vuren and Roy 

have estimated the water purification values of these wetlands, and it seems very likely that 

wetlands in the Midwest would provide the service of nutrient retention. As noted above, 

Jenkins, et al. estimate the value of this service to be some worth some $10,000 per acre on the 

lower Mississippi River, while Thibodeau and Ostro (1981) value it at over $100,000 per acre for 

riverine wetlands in Massachusetts (although, because Thibodeau and Ostro adopt a replacement 

cost approach to valuation, they may overstate true social benefits). It may be reasonable, then, 

to add the Jenkins, et al. (2008) estimate of nutrient retention value to the Amacher et al. (1989) 

fisheries value to arrive at the high estimate of benefits 

Low estimate High estimate Low estimate High estimate 

of benefits of benefits of costs of costs 

$6,395 $67,346 $40,000 $80,000 
21 

Example 5: Riverine wetlands in Massachusetts 

In 1981 Thibodeau and Ostro completed a very thorough study of the value of riverine wetlands 

in Massachusetts. The catalogued several categories of recreational, amenity, flood control, and 

water quality benefits. Regrettably, however, they estimated water purification and nutrient 

retention values using replacement cost approaches. Replacement costs may or may not reflect 

true social values; they are only valid if society would, in fact, pay to replace such lost services. 

So, we form our low and high estimates of benefits by either excluding the replacement-costbased estimates or including them, respectively. Because it seems unlikely that there would be 

no benefit to the nutrient retention/water purification services of such wetlands, we substitute the 

Jenkins et al. (2008) estimates of values to form the low estimate. 

 

Low estimate High estimate Low estimate High estimate 

of benefits of benefits of costs of costs 

$153,620 $645,051 $124,000 $160,000 

The higher benefit estimation figure may beg again the question of whether the wetlands 

considered in this study would be representative of those likely to be found jurisdictional under 

the guidance. More generally, however, the Massachusetts example underscores a general 

principle: the costs and benefits of wetland preservation are likely to be correlated. Wetlands 

are valuable largely inasmuch as they provide goods and services that can be enjoyed by people 

nearby: if they purify water, protect against storms, provide recreational and scenic amenities, 

etc., in locations where there large numbers of people. However, locations in which there are 

large numbers of people are also locations in which property values, and hence the opportunity 

costs of wetland preservation, are high. 

Studies cited: 

Costanza, R., O. Perez-Maqueo, M. L. Martinez, P. Sutton, S. J. Anderson and K. Mulder. 2008. 

The Value of Coastal Wetlands for Hurricane Protection. Ambio 37 (4). 241 – 248. 

Farber, S. 1987. "The Value of Coastal Wetlands for Protection of Property Against Hurricane 

Wind Damage," Journal of Environmental Economics and Managment 14(2):143-151. 

Farber, S. 1996. "Welfare Loss of Wetlands Disintegration: A Louisiana Study," Contemporary 

Economic Policy 14(2):92-106. 

Farber, S. and Costanza, R. 1987. "The Economic Value of Wetland Systems," Journal of 

Environmental Management 24:41-51. 

Fischer, A.C., M. Hanemann, J.Harte, A. Horne, G. Ellis, and D. Von Hippel. 1986. Economic 

Valuation of Aquatic Ecosystems. Final report to the U.S. EPA, Cooperative Agreement No. 

811847, October. 
22 

Lant, C.L., and R.S. Roberts. 1990. "Greenbelts in the Cornbelt: Riparian wetlands, intrinsic 

values, and market failure," Environment and Planning 22:1375-1388. 

Lynne, G.D., P. Conroy, and F. Pochasta. 1981. "Economic Valuation of Marsh Areas to Marine 

Production Processes," Journal of Environmental Economics and Management 8(2):175-186 

Poor, P.J. 1997. "The Contingent Valuation of Nebraska's Rainwater Basin Wetlands." Selected 

paper presented at the American Agricultural Economics Association meetings, Toronto, 

Canada, July, 36 pp. 

Thibodeau, F.R. and B.D. Ostro. 1981. "An Economic Analysis of Wetland Protection," Journal 

of Environmental Management 12:19-30. 

van Vuuren, W., and P. Roy. 1993. "Private and Social Returns from Wetland Preservation 

versus Those from Wetland Conversion to Agriculture," Ecological Economics 8(1993): 289-

305. 

 
23 

APPENDIX A: Indirect Cost Estimate Tables

Preliminary Estimate of 404 Wetland Mitigation Costs:  Baseline

Baseline Mitigation Baseline Costs Wetland Mitigation Unit Cost Stream Mitigation Unit Cost

Wetland Stream Wetlands Wetlands Streams per acre per acre per lin. ft. per lin. ft.

Acres Linear Feet low mid‐range mid‐range Low High Low High

STATE BASE WETMIT BASE STRMIT BASE$ LOW BASE$ MID BASE STR COST UC LOW UC HIGH UC LOW UC HIGH

AK 1065.4 3,834.7 $532,685 $        16,246,877 $          931,839 $                  500   $            30,000   $                  170   $                  316

AL 638.1 69,808.0 $6,380,970 $          9,571,455 $     43,211,152 $            10,000   $            20,000   $                  350   $                  888

AR 504.6 25,200.7 $1,009,149 $          1,766,011 $       6,123,758 $               2,000   $               5,000   $                  170   $                  316

AZ 43.6 36.0 $392,135 $             697,128 $               8,748 $               9,000   $            23,000   $                  170   $                  316

CA 5585.5 192,492.4 $103,330,955 $     889,484,036 $     46,775,658 $            18,500   $          300,000   $                  170   $                  316

CO 1113.2 9,945.0 $35,620,992 $        73,468,297 $       2,416,635 $            32,000   $          100,000   $                  170   $                  316

CT 125.1 $15,511,098 $        17,762,709 $                   ‐ $          124,000   $          160,000   $                  170   $                  316

DE 136.3 $5,453,340 $          5,453,340 $                   ‐ $            40,000   $            40,000   $                  170   $                  316

FL 2823.6 30,582.4 $98,827,733 $     254,128,457 $       7,431,533 $            35,000   $          145,000   $                  170   $                  316

GA 1983.2 109,443.2 $23,797,926 $     132,871,755 $     21,833,912 $            12,000   $          122,000   $                  106   $                  293

IA 653.6 18,040.5 $9,803,363 $          9,803,363 $       4,383,842 $            15,000   $            15,000   $                  170   $                  316

ID 337.3 46,406.0 $13,492,800 $        13,492,800 $     11,276,658 $            40,000   $            40,000   $                  170   $                  316

IL 756.2 26,249.0 $30,246,360 $        90,739,081 $       6,378,507 $            40,000   $          200,000   $                  170   $                  316

IN 1232.6 384,647.7 $49,304,940 $        73,957,411 $     93,469,391 $            40,000   $            80,000   $                  170   $                  316

KS 357.0 328,949.3 $17,849,850 $        17,849,850 $     79,934,687 $            50,000   $            50,000   $                  170   $                  316

KY 477.9 195,235.0 $14,336,100 $        14,336,100 $     55,251,511 $            30,000   $            30,000   $                  170   $                  396

LA 2756.2 53,874.8 $41,342,783 $        89,576,030 $     13,091,586 $            15,000   $            50,000   $                  170   $                  316

MA 95.6 0.0 $11,851,176 $        13,571,508 $                   ‐ $          124,000   $          160,000   $                  170   $                  316

MD 378.1 11,210.0 $4,158,875 $        13,043,743 $       4,954,820 $            11,000   $            58,000   $                  250   $                  634

ME 278.3 3,905.6 $34,786,125 $        38,125,593 $          949,056 $          125,000   $          149,000   $                  170   $                  316

MI 189.7 2,935.0 $7,589,700 $        11,384,550 $          713,205 $            40,000   $            80,000   $                  170   $                  316

MN 1955.1 1,200.0 $7,820,202 $        92,864,900 $          291,600 $               4,000   $            91,000   $                  170   $                  316

MO 746.3 53,585.0 $11,194,808 $        14,926,410 $       7,769,825 $            15,000   $            25,000   $                    90   $                  200

MS 988.1 14,360.3 $2,964,200 $        13,832,931 $       3,489,560 $               3,000   $            25,000   $                  170   $                  316

MT 576.3 14,472.0 $23,050,200 $        23,050,200 $       3,516,696 $            40,000   $            40,000   $                  170   $                  316

NC 2061.9 138,035.1 $47,422,976 $        87,629,412 $     40,996,413 $            23,000   $            62,000   $                  256   $                  338

ND 847.5 14,049.8 $12,712,748 $        12,712,748 $       3,414,089 $            15,000   $            15,000   $                  170   $                  316

NE 723.8 3,994.0 $10,857,488 $        10,857,488 $          970,542 $            15,000   $            15,000   $                  170   $                  316

NH 247.4 22,214.0 $34,136,784 $        41,557,824 $       5,398,002 $          138,000   $          198,000   $                  170   $                  316

NJ 125.1 $10,007,160 $        30,021,480 $                   ‐ $            80,000   $          400,000   $                  170   $                  316

NM 74.5 12,277.6 $2,979,660 $          3,724,575 $       2,983,445 $            40,000   $            60,000   $                  170   $                  316

NV 87.1 900.0 $4,792,755 $          5,228,460 $          218,700 $            55,000   $            65,000   $                  170   $                  316

NY 1903.0 23,163.9 $95,152,351 $     114,182,821 $       5,628,818 $            50,000   $            70,000   $                  170   $                  316

OH 1963.5 90,969.9 $29,452,253 $        29,452,253 $     22,105,688 $            15,000   $            15,000   $                  170   $                  316

OK 59.0 19,847.0 $708,372 $          1,829,961 $       4,822,821 $            12,000   $            50,000   $                  170   $                  316

OR 952.9 4,200.2 $40,975,947 $        80,046,037 $       1,020,641 $            43,000   $          125,000   $                  170   $                  316

PA 3374.6 229,011.2 $40,495,266 $        45,557,175 $     55,649,712 $            12,000   $            15,000   $                  170   $                  316

RI 49.2 $6,099,870 $          6,985,335 $                   ‐ $          124,000   $          160,000   $                  170   $                  316

SC 2820.8 6,450.2 $70,520,963 $     176,302,408 $          886,903 $            25,000   $          100,000   $                    75   $                  200

SD 358.4 0.0 $5,376,038 $          5,376,038 $                   ‐ $            15,000   $            15,000   $                  170   $                  316

TN 591.7 54,712.0 $4,142,009 $          7,988,159 $       6,839,000 $               7,000   $            20,000   $                    50   $                  200

TX 3255.1 185,639.3 $48,827,070 $        97,654,141 $     26,267,960 $            15,000   $            45,000   $                    80   $                  203

UT 1381.6 263,404.8 $75,988,358 $        82,896,391 $     64,007,366 $            55,000   $            65,000   $                  170   $                  316

VA 1815.9 48,455.0 $29,054,496 $     141,640,669 $     29,073,000 $            16,000   $          140,000   $                  300   $                  900

VT 160.2 $17,624,970 $        19,387,467 $                   ‐ $          110,000   $          132,000   $                  170   $                  316

WA 986.7 37,774.9 $98,666,101 $     172,665,677 $       9,179,296 $          100,000   $          250,000   $                  170   $                  316

WI 2246.0 $89,839,561 $        89,839,561 $                   ‐ $            40,000   $            40,000   $                  170   $                  316

WV 278.3 45,665.0 $8,348,670 $        12,523,005 $     27,399,000 $            30,000   $            60,000   $                  400   $                  800

WY 839.1 20.0 $12,586,253 $        12,586,253 $               4,860 $            15,000   $            15,000   $                  170   $                  316

53000           2,797,196 $1,367,416,585 $ 3,220,649,871 $  721,070,435

Average Cost per Acre: $25,800 $               60,767

Average Cost per Linear Foot: $                  258

Total Wetland and Stream Baseline Cost: $2,088,487,020 $3,941,720,306

 
24 

Amount of Wetland Acres Increased Annual Costs Unit Cost Per Acre Mitigated

2009‐2010 Aquatic Resource/JD Records, ACOE Mitigated

Total

Isolated

Total

Wetland

Neg JD

Wetland

% Neg JD

Wetland

Baseline

Mitigation

Increased

Wetlands

Low

Cost

Mid

Cost

High

Cost

Unit Cost

Low

Unit Cost

High

STATE ISO TOT WET TOT WET NO %WET NO BASE MIT WET INC WET COSTS LOW WET COSTS MID WET COSTS HIGH UNIT COST LOW UNIT COST HIGH

AK 14 760 2 0.3% 1065.4 2.8 $                  1,406 $               42,868 $               84,330 $                     500   $                30,000

AL 7 460 6 1.3% 638.1 8.4 $               84,330 $             126,495 $             168,660 $               10,000   $                20,000

AR 13 363 4 1.1% 504.6 5.6 $               11,244 $               19,677 $               28,110 $                 2,000   $                  5,000

AZ 0 31 0 0.0% 43.6 0.0 $                      ‐ $                      ‐ $                      ‐  $                 9,000   $                23,000

CA 1463 3991 17 0.4% 5585.5 23.9 $             442,030 $          3,805,040 $          7,168,050 $               18,500   $              300,000

CO 215 837 45 5.4% 1113.2 63.2 $          2,023,920 $          4,174,335 $          6,324,750 $               32,000   $              100,000

CT 5 92 3 3.3% 125.1 4.2 $             522,846 $             598,743 $             674,640 $             124,000   $              160,000

DE 14 98 1 1.0% 136.3 1.4 $               56,220 $               56,220 $               56,220 $               40,000   $                40,000

FL 309 2033 24 1.2% 2823.6 33.7 $          1,180,620 $          3,035,880 $          4,891,140 $               35,000   $              145,000

GA 100 1432 21 1.5% 1983.2 29.5 $             354,186 $          1,977,539 $          3,600,891 $               12,000   $              122,000

IA 52 469 4 0.9% 653.6 5.6 $               84,330 $               84,330 $               84,330 $               15,000   $                15,000

ID 22 244 4 1.6% 337.3 5.6 $             224,880 $             224,880 $             224,880 $               40,000   $                40,000

IL 277 547 9 1.6% 756.2 12.6 $             505,980 $          1,517,940 $          2,529,900 $               40,000   $              200,000

IN 320 891 14 1.6% 1232.6 19.7 $             787,080 $          1,180,620 $          1,574,160 $               40,000   $                80,000

KS 19 257 3 1.2% 357.0 4.2 $             210,825 $             210,825 $             210,825 $               50,000   $                50,000

KY 58 341 1 0.3% 477.9 1.4 $               42,165 $               42,165 $               42,165 $               30,000   $                30,000

LA 28 1990 29 1.5% 2756.2 40.8 $             611,393 $          1,324,684 $          2,037,975 $               15,000   $                50,000

MA 1 68 0 0.0% 95.6 0.0 $                      ‐ $                      ‐ $                      ‐  $             124,000   $              160,000

MD 5 349 80 22.9% 378.1 112.4 $          1,236,840 $          3,879,180 $          6,521,520 $               11,000   $                58,000

ME 0 200 2 1.0% 278.3 2.8 $             351,375 $             385,107 $             418,839 $             125,000   $              149,000

MI 2 139 4 2.9% 189.7 5.6 $             224,880 $             337,320 $             449,760 $               40,000   $                80,000

MN 198 1422 31 2.2% 1955.1 43.6 $             174,282 $          2,069,599 $          3,964,916 $                 4,000   $                91,000

MO 53 538 7 1.3% 746.3 9.8 $             147,578 $             196,770 $             245,963 $               15,000   $                25,000

MS 10 705 2 0.3% 988.1 2.8 $                  8,433 $               39,354 $               70,275 $                 3,000   $                25,000

MT 49 410 0 0.0% 576.3 0.0 $                      ‐ $                      ‐ $                      ‐  $               40,000   $                40,000

NC 59 1473 6 0.4% 2061.9 8.4 $             193,959 $             358,403 $             522,846 $               23,000   $                62,000

ND 1388 612 9 1.5% 847.5 12.6 $             189,743 $             189,743 $             189,743 $               15,000   $                15,000

NE 157 517 2 0.4% 723.8 2.8 $               42,165 $               42,165 $               42,165 $               15,000   $                15,000

NH 0 178 2 1.1% 247.4 2.8 $             387,918 $             472,248 $             556,578 $             138,000   $              198,000

NJ 34 89 0 0.0% 125.1 0.0 $                      ‐ $                      ‐ $                      ‐  $               80,000   $              400,000

NM 14 53 0 0.0% 74.5 0.0 $                      ‐ $                      ‐ $                      ‐  $               40,000   $                60,000

NV 237 62 0 0.0% 87.1 0.0 $                      ‐ $                      ‐ $                      ‐  $               55,000   $                65,000

NY 530 1382 28 2.0% 1903.0 39.4 $          1,967,700 $          2,361,240 $          2,754,780 $               50,000   $                70,000

OH 582 1438 41 2.9% 1963.5 57.6 $             864,383 $             864,383 $             864,383 $               15,000   $                15,000

OK 2 47 5 10.6% 59.0 7.0 $               84,330 $             217,853 $             351,375 $               12,000   $                50,000

OR 37 682 4 0.6% 952.9 5.6 $             241,746 $             472,248 $             702,750 $               43,000   $              125,000

PA 375 2410 9 0.4% 3374.6 12.6 $             151,794 $             170,768 $             189,743 $               12,000   $                15,000

RI 2 35 0 0.0% 49.2 0.0 $                      ‐ $                      ‐ $                      ‐  $             124,000   $              160,000

SC 474 2021 14 0.7% 2820.8 19.7 $             491,925 $          1,229,813 $          1,967,700 $               25,000   $              100,000

SD 310 260 5 1.9% 358.4 7.0 $             105,413 $             105,413 $             105,413 $               15,000   $                15,000

TN 31 425 4 0.9% 591.7 5.6 $               39,354 $               75,897 $             112,440 $                 7,000   $                20,000

TX 266 2332 16 0.7% 3255.1 22.5 $             337,320 $             674,640 $          1,011,960 $               15,000   $                45,000

UT 53 991 8 0.8% 1381.6 11.2 $             618,420 $             674,640 $             730,860 $               55,000   $                65,000

VA 91 1296 4 0.3% 1815.9 5.6 $               89,952 $             438,516 $             787,080 $               16,000   $              140,000

VT 6 117 3 2.6% 160.2 4.2 $             463,815 $             510,197 $             556,578 $             110,000   $              132,000

WA 25 703 1 0.1% 986.7 1.4 $             140,550 $             245,963 $             351,375 $             100,000   $              250,000

WI 146 1645 47 2.9% 2246.0 66.1 $          2,642,340 $          2,642,340 $          2,642,340 $               40,000   $                40,000

WV 115 208 10 4.8% 278.3 14.1 $             421,650 $             632,475 $             843,300 $               30,000   $                60,000

WY 41 637 40 6.3% 839.1 56.2 $             843,300 $             843,300 $             843,300 $               15,000   $                15,000

8209 38280 571 1.5% 53000.0 802.5 $       19,604,617 $       38,551,811 $       57,499,006

Average Cost per Acre: $               24,428 $               48,037 $               71,646

Total Cost, Including Stream Mitigation: $       28,295,539 $       51,535,451 $       74,775,364

Plus 10% Allowance for Current Impacts w/o JDs: $       31,125,093 $       56,688,996 $       82,252,900

Preliminary Estimate of 404 Wetland Mitigation Costs

Preliminary Estimate of 404 Wetland Mitigation Costs:  Estimate 1 ‐ Significant Nexus Waters
25 

2009‐2010 Aquatic Resource/JD Records, ACOE Amount of Wetland Acres Increased Annual Costs Unit Cost Per Acre Mitigated

Total

Isolated

Total

Wetland

Neg JD

Wetland

% Neg JD

Wetland

Baseline

Mitigation

Plus 17%

Isolated

Low

Cost

Mid

Cost

High

Cost

Unit Cost

Low

Unit Cost

High

STATE ISO TOT WET TOT WET NO %WET NO BASE MIT +0.17 ISO INC WET COSTS LOW WET COSTS MID WET COSTS HIGH UNIT COST LOW UNIT COST HIGH

AK 14 760 2 0.3% 1065.4 6.2 $                  3,078 $                93,880 $               184,683 $                     500   $                30,000

AL 7 460 6 1.3% 638.1 10.1 $              101,055 $              151,583 $               202,111 $               10,000   $                20,000

AR 13 363 4 1.1% 504.6 8.7 $                17,456 $                30,549 $                  43,641 $                 2,000   $                  5,000

AZ 0 31 0 0.0% 43.6 0.0 $                      ‐ $                       ‐ $                        ‐  $                 9,000   $                23,000

CA 1463 3991 17 0.4% 5585.5 126.7 $           2,344,058 $        20,177,903 $          38,011,748 $               18,500   $              300,000

CO 215 837 45 5.4% 1113.2 114.6 $           3,667,793 $          7,564,823 $          11,461,853 $               32,000 $              100,000

CT 5 92 3 3.3% 125.1 5.4 $              670,986 $              768,387 $               865,788 $             124,000   $              160,000

DE 14 98 1 1.0% 136.3 4.8 $              190,024 $              190,024 $               190,024 $               40,000   $                40,000

FL 309 2033 24 1.2% 2823.6 107.6 $           3,764,702 $          9,680,662 $          15,596,623 $               35,000   $              145,000

GA 100 1432 21 1.5% 1983.2 53.4 $              640,908 $          3,578,403 $            6,515,898 $               12,000   $              122,000

IA 52 469 4 0.9% 653.6 18.0 $              270,699 $              270,699 $               270,699 $               15,000   $                15,000

ID 22 244 4 1.6% 337.3 10.9 $              435,143 $              435,143 $               435,143 $               40,000 $                40,000

IL 277 547 9 1.6% 756.2 78.8 $          3,153,380 $          9,460,139 $          15,766,899 $               40,000   $              200,000

IN 320 891 14 1.6% 1232.6 96.1 $          3,845,448 $          5,768,172 $            7,690,896 $               40,000   $                80,000

KS 19 257 3 1.2% 357.0 8.8 $              437,813 $              437,813 $               437,813 $               50,000   $                50,000

KY 58 341 1 0.3% 477.9 15.3 $              457,912 $              457,912 $               457,912 $               30,000   $                30,000

LA 28 1990 29 1.5% 2756.2 47.4 $              711,745 $          1,542,115 $            2,372,484 $               15,000 $                50,000

MA 1 68 0 0.0% 95.6 0.2 $                29,628 $                33,929 $                  38,230 $             124,000   $              160,000

MD 5 349 80 22.9% 378.1 113.6 $          1,249,981 $          3,920,396 $            6,590,811 $               11,000   $                58,000

ME 0 200 2 1.0% 278.3 2.8 $              351,375 $              385,107 $               418,839 $             125,000   $              149,000

MI 2 139 4 2.9% 189.7 6.1 $              243,995 $              365,992 $               487,990 $               40,000   $                80,000

MN 198 1422 31 2.2% 1955.1 90.9 $              363,519 $          4,316,782 $            8,270,046 $                 4,000   $                91,000

MO 53 538 7 1.3% 746.3 22.5 $              337,531 $              450,041 $               562,551 $               15,000 $                25,000

MS 10 705 2 0.3% 988.1 5.2 $                15,601 $                72,805 $               130,009 $                 3,000   $                25,000

MT 49 410 0 0.0% 576.3 11.7 $              468,313 $              468,313 $               468,313 $               40,000   $                40,000

NC 59 1473 6 0.4% 2061.9 22.5 $              518,194 $              957,532 $            1,396,870 $               23,000   $                62,000

ND 1388 612 9 1.5% 847.5 344.3 $          5,164,369 $          5,164,369 $            5,164,369 $               15,000   $                15,000

NE 157 517 2 0.4% 723.8 40.3 $              604,857 $              604,857 $               604,857 $               15,000   $                15,000

NH 0 178 2 1.1% 247.4 2.8 $              387,918 $              472,248 $               556,578 $             138,000   $              198,000

NJ 34 89 0 0.0% 125.1 8.1 $              649,903 $          1,949,710 $            3,249,516 $               80,000   $              400,000

NM 14 53 0 0.0% 74.5 3.3 $              133,804 $              167,255 $               200,705 $               40,000   $                60,000

NV 237 62 0 0.0% 87.1 56.6 $          3,114,518 $          3,397,656 $            3,680,794 $               55,000   $                65,000

NY 530 1382 28 2.0% 1903.0 166.0 $           8,299,478 $          9,959,373 $          11,619,269 $               50,000   $                70,000

OH 582 1438 41 2.9% 1963.5 196.7 $           2,950,285 $          2,950,285 $            2,950,285 $               15,000 $                15,000

OK 2 47 5 10.6% 59.0 7.5 $                90,064 $              232,666 $               375,269 $               12,000   $                50,000

OR 37 682 4 0.6% 952.9 14.5 $              621,892 $          1,214,858 $            1,807,824 $               43,000   $              125,000

PA 375 2410 9 0.4% 3374.6 102.3 $           1,227,002 $          1,380,377 $            1,533,752 $               12,000   $                15,000

RI 2 35 0 0.0% 49.2 0.5 $                59,256 $                67,858 $                  76,459 $             124,000   $              160,000

SC 474 2021 14 0.7% 2820.8 132.9 $           3,323,305 $          8,308,262 $          13,293,219 $               25,000   $              100,000

SD 310 260 5 1.9% 358.4 81.1 $          1,216,460 $          1,216,460 $            1,216,460 $               15,000   $                15,000

TN 31 425 4 0.9% 591.7 13.0 $                91,203 $              175,891 $               260,580 $                 7,000   $                20,000

TX 266 2332 16 0.7% 3255.1 86.0 $          1,290,671 $          2,581,341 $            3,872,012 $               15,000   $                45,000

UT 53 991 8 0.8% 1381.6 23.9 $          1,314,916 $          1,434,453 $            1,553,991 $               55,000   $                65,000

VA 91 1296 4 0.3% 1815.9 27.4 $              437,841 $          2,134,477 $            3,831,112 $               16,000   $              140,000

VT 6 117 3 2.6% 160.2 5.7 $              621,512 $              683,663 $               745,815 $             110,000 $              132,000

WA 25 703 1 0.1% 986.7 7.4 $              737,888 $          1,291,303 $            1,844,719 $             100,000   $              250,000

WI 146 1645 47 2.9% 2246.0 100.9 $           4,037,720 $          4,037,720 $            4,037,720 $               40,000   $                40,000

WV 115 208 10 4.8% 278.3 41.5 $          1,245,976 $          1,868,964 $            2,491,952 $               30,000   $                60,000

WY 41 637 40 6.3% 839.1 66.0 $              990,245 $              990,245 $               990,245 $               15,000   $                15,000

8209 38280 571 1.5% 53000 2517 $        62,901,417 $      123,863,396 $       184,825,374 $               39,286 $               85,102

Average Cost per Acre: $                24,989 $                49,207 $                 73,425

Total Cost, Including Stream Mitigation: $        71,592,339 $      136,847,036 $       202,101,732

Plus 10% Allowance for Current Impacts w/o JDs: $        78,751,573 $      150,531,739 $       222,311,906

Preliminary Estimate of 404 Wetland Mitigation Costs:  Estimate 2 ‐ Significant Nexus Waters and 17% of Isolated Waters

 
26 

Preliminary Estimate of 404 Stream Mitigation Costs

 

2009‐2010 Aquatic Resource/JD Amount of Stream Linear Increased Annual Costs Unit Cost Per Linear Foot

Records, ACOE Feet Mitigated Mitigated

Total

Streams

Neg JD

Streams

% Neg JD

Streams

Baseline

Mitigation

Increased

Streams

Low

Cost

High

Cost

Unit Cost

Low

Unit Cost

High

STATE STR TOT STR NO %STR NO BASE MIT STR INC STR COSTS LOW STR COSTS HIGH UNIT COST LOW UNIT COST HIGH

AK 1060 7 0.7% 3,834.7 25.5 $                    4,334 $                    8,055 $                     170   $                     316

AL 1335 11 0.8% 69,808.0 580.0 $               202,992 $               515,019 $                     350   $                     888

AR 2968 78 2.6% 25,200.7 680.2 $               115,627 $               214,929 $                     170   $                     316

AZ 417 46 11.0% 36.0 4.5 $                       759 $                    1,411 $                     170   $                     316

CA 3452 113 3.3% 192,492.4 6514.4 $            1,107,451 $            2,058,556 $                     170   $                     316

CO 2068 62 3.0% 9,945.0 307.4 $                  52,253 $                  97,130 $                     170   $                     316

CT 604 1 0.2% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

DE 143 2 1.4% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

FL 5053 32 0.6% 30,582.4 194.9 $                  33,135 $                  61,591 $                     170   $                     316

GA 2588 40 1.5% 109,443.2 1718.1 $               182,119 $               503,404 $                     106   $                     293

IA 787 20 2.5% 18,040.5 470.4 $                  79,971 $               148,652 $                     170   $                     316

ID 1319 22 1.7% 46,406.0 787.1 $               133,815 $               248,739 $                     170   $                     316

IL 1982 22 1.1% 26,249.0 294.6 $                  50,087 $                  93,104 $                     170   $                     316

IN 2746 19 0.7% 384,647.7 2680.0 $               455,597 $               846,874 $                     170   $                     316

KS 2085 54 2.6% 328,949.3 8746.1 $            1,486,832 $            2,763,757 $                     170   $                     316

KY 2294 10 0.4% 195,235.0 854.8 $               145,315 $               338,499 $                     170   $                     396

LA 3784 63 1.7% 53,874.8 912.2 $               155,066 $               288,240 $                     170   $                     316

MA 508 5 1.0% 0.0 0.0 $                        ‐ $                        ‐ $                     170   $                     316

MD 894 2 0.2% 11,210.0 25.1 $                    6,284 $                  15,935 $                     250   $                     634

ME 755 14 1.9% 3,905.6 73.8 $                  12,544 $                  23,318 $                     170   $                     316

MI 1424 8 0.6% 2,935.0 16.6 $                    2,819 $                    5,240 $                     170   $                     316

MN 1360 20 1.5% 1,200.0 17.9 $                    3,045 $                    5,660 $                     170   $                     316

MO 4352 66 1.5% 53,585.0 825.2 $                  74,264 $               165,031 $                       90   $                     200

MS 1679 29 1.7% 14,360.3 252.4 $                  42,907 $                  79,756 $                     170   $                     316

MT 1167 12 1.0% 14,472.0 150.4 $                  25,561 $                  47,513 $                     170   $                     316

NC 2240 12 0.5% 138,035.1 743.5 $               190,325 $               251,288 $                     256   $                     338

ND 802 7 0.9% 14,049.8 123.7 $                  21,030 $                  39,092 $                     170   $                     316

NE 1325 29 2.2% 3,994.0 89.4 $                  15,193 $                  28,242 $                     170   $                     316

NH 441 89 20.2% 22,214.0 5616.6 $               954,823 $            1,774,848 $                     170   $                     316

NJ 252 1 0.4% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

NM 635 10 1.6% 12,277.6 196.4 $                  33,395 $                  62,075 $                     170   $                     316

NV 592 72 12.2% 900.0 124.6 $                  21,185 $                  39,378 $                     170   $                     316

NY 3521 125 3.6% 23,163.9 852.6 $               144,945 $               269,427 $                     170   $                     316

OH 2363 39 1.7% 90,969.9 1526.6 $               259,523 $               482,407 $                     170   $                     316

OK 1482 57 3.8% 19,847.0 793.9 $               134,960 $               250,866 $                     170   $                     316

OR 1646 9 0.5% 4,200.2 23.1 $                    3,926 $                    7,297 $                     170   $                     316

PA 6403 114 1.8% 229,011.2 4151.3 $               705,714 $            1,311,798 $                     170   $                     316

RI 117 0 0.0% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

SC 2097 17 0.8% 6,450.2 52.7 $                    3,954 $                  10,544 $                       75   $                     200

SD 599 11 1.8% 0.0 0.0 $                        ‐ $                        ‐ $                     170   $                     316

TN 3606 57 1.6% 54,712.0 878.7 $                  43,936 $               175,744 $                       50   $                     200

TX 4171 77 1.8% 185,639.3 3491.5 $               279,320 $               708,776 $                       80   $                     203

UT 1878 2 0.1% 263,404.8 280.8 $                  47,739 $                  88,738 $                     170   $                     316

VA 4386 98 2.2% 48,455.0 1107.4 $               332,224 $               996,672 $                     300   $                     900

VT 425 24 5.6% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

WA 1742 6 0.3% 37,774.9 130.6 $                  22,195 $                  41,256 $                     170   $                     316

WI 3029 60 2.0% 0.0 $                        ‐ $                        ‐ $                     170   $                     316

WV 2896 165 5.7% 45,665.0 2759.0 $            1,103,585 $            2,207,170 $                     400   $                     800

WY 2004 99 4.9% 20.0 1.0 $                       177 $                       328 $                     170   $                     316

95476 1938 2.0%         2,797,196       49,075 $            8,690,922 $          17,276,358
27 

ISO TOT

WET TOT

WET NO

%WET NO

BASE MIT

WET INC

+0.17 ISO INC

WET COSTS

0.17 ISO COSTS

(1)

(2)

(3)

 

Total number of records in Army Corp JD Database associated with aquatic resoure type "Isolated Waters" (inclu

Total number of records in Army Corp JD Database associated with wetland aquatic resoure types (1)

Number of those total wetland records that have a negative JD associated with them (2)

Percent of isolated water records with negative JD, [ISO NO]/[ISO TOT]

This is the total area of compensatory wetland mitigation (53,000) apportioned by state in proportion to [WET T

Incremental Increase in Number Acres of Non‐Isolated Wetlands Mitigated (3)  =[WET TOT]/([WET TOT]‐[WET NO

Incremental Increase in Number Acres of Isolated Wetlands Mitigated = ([WET TOT]+0.17*[ISO NO])/([WET TOT]

Annual costs associated with [WET INC]

Annual costs associated with [+0.2 ISO INC]

Includes NRPW associated wetlands, wetlands abutting and adjacent to RPWs, TNW associated wetlands

In theory, wetlands abutting an RPW and TNW‐wetlands should all be jurisdictional

Wetlands adjacent to RPWs and associated with NRPW are subject to the significant nexus test

Assumes all negative JDs within [WET TOT] are jurisdictional under revised guidance, including all subject to SN t
28 

APPENDIX B: Corps Analysis of Sample Jurisdictional Determinations for “Other 

Waters” 

To better understand the effect of the proposed guidance on the outcome of jurisdictional 

determination decisions, the Corps of Engineers evaluated a random sample of project files 

previously determined to be non-jurisdictional under the 2008 guidance. The randomly selected 

files were chosen from a comprehensive list of 2,617 “isolated” (other water) project files 

previously elevated to headquarters between the period of June 2008 and January 2011. The 

Corps evaluated 10% or 262 of these files. The 262 project files contained approximately 1,211 

aquatic resources (many files contained multiple types of waters, including streams, wetlands, 

and non-wetland other waters (i.e. lakes/ponds and prairie potholes). The Corps evaluated 

whether the jurisdictional status of these waters would change based on application of the 

proposed guidance. Potential changes to the jurisdictional status were evaluated in terms of the 

following: 

 1. the water had the capacity to provide commercial waterborne recreation and thus 

would be considered a Traditional Navigable Water (TNW) (Section 1 of the proposed 

guidance); 

 2. the water was a tributary to a newly identified TNW (Section 1 and Section 4 of the 

proposed guidance; 

 3. the water would now be considered adjacent or physically proximate due to the 

presence of hydrological or ecological connection and when considered in aggregate, may have a 

significant nexus (SN) to a TNW (Section 3, 5, 6 of the proposed guidance); or 

4. the water was isolated/not physically proximate but when considered individually 

may have a SN. (Section 6 of the proposed guidance.) 

For those waters that required a significant nexus (SN) evaluation (#3 and #4 listed 

above), the Corps presumed adjacent wetlands would have a SN to a TNW and would be 

jurisdictional so no SN evaluation was formally conducted. For all proximate non-wetland other 

waters, we conducted a SN evaluation in accordance with the guidance and if an SN was found, 

the water was jurisdictional and if a SN was not found, the water was determined not -

jurisdictional. For all isolated (not adjacent/not physically proximate) wetlands and other nonwetland waters, we presumed that those waters would not have a SN to a TNW and would not be 

-jurisdictional so we did not conduct a SN evaluation. 

Approximately 17% (204) of the 1,211 waters reviewed became jurisdictional under the 

proposed guidance while 83% (1007) of the previously determined non-jurisdictional waters 

under the 2008 guidance remained non-jurisdictional. This is broken down as follows: 

Jurisdictional: Fourteen (14) out of 1,211 (1.2%) other waters were determined to be TNWs 

using the proposed guidance; about 5 out of 1,211 (0.4%) would be considered tributaries to the 

newly identified TNWs and thus jurisdictional under the proposed guidance; twelve (12) out of 

1,211 or (1%) were determined to be “physically proximate non-wetland waters” and were 

evaluated and determined to have a significant nexus to a TNW when aggregated in the single 

point of entry watershed; and 173 out of 1,211(14.3%) were wetlands that were determined to be 

adjacent to jurisdictional waters with a hydrologic or ecological connection using the proposed 

guidance and were presumed to have a significant nexus when aggregated in the single point of 
29 

entry watershed. The review results noted that these adjacent wetland determinations were due 

to a more robust description of the term adjacency, specifically, the potential hydrologic or 

ecological connections to existing jurisdictional non-wetland waters (84%) or were now 

considered adjacent to a newly identified TNW (16%). 

 

Non-Jurisdictional: 717 out of 1,211 (59.2%) of the other waters were wetlands that remained 

non-jurisdictional using the proposed guidance because they were not adjacent to jurisdictional 

waters (i.e. no apparent hydrologic or ecological connection); 282 out of 1,211 (23.3%) of the 

other waters were non-wetland waters that were not proximate and were presumed not to have a 

significant nexus to a TNW; and eight (8) out of 1,211 (0.7%) were determined to be physically 

proximate non-wetland waters and were evaluated and determined to not have a significant 

nexus to a TNW when aggregated in the single point of entry watershed. 

 
30 

APPENDIX C: Ecosystem Services Associated with Small Streams and Wetlands 

Applying economic study and concepts to ecosystem services helps illustrate two major 

points: that prosperity depends on maintaining the flow of benefits from ecosystems and that 

successful environmental protection needs to be grounded in sound economics that includes 

recognizing costs and benefits.24 This appendix briefly describes some of the most relevant 

ecosystem services provided by small streams and wetlands. 

 A. Habitat and Biodiversity (genetic resources) 

Small streams and wetlands meet a variety of habitat needs for many plants, fish, 

amphibians, birds, mammals, macroinvertebrates, and microorganisms. They provide shelter, 

food, spawning sties, and nursery areas. These systems also often provide refuge for fish from 

predators and downstream disturbances such as floods, as well as critical life-stage habitat found 

nowhere else in the watershed. Some organisms spend a significant part of their lives in nonisolated aquatic systems, but require geographically isolated wetlands to complete their life 

cycles. 

Because small streams and wetlands typically exhibit variable conditions over time and 

space, the type of habitat they provide is much different than what is provided by other water 

systems. Small streams and wetlands contribute to maintaining species diversity in a landscape 

by providing distinct habitat for native plants and animals, providing seasonally important 

refuge, serving as stepping stones between aquatic habitats, and holding water to supply 

terrestrial and avian species that live in the larger, and typically drier, ecosystem. These species 

collectively store a diversity of genetic material that defines important components of the ecosystem 

at large and specific communities within the larger system. On a smaller scale, individual waters 

may include populations or sub-populations with unique genetic resources, which ultimately may be 

needed for re-colonization. A loss of species or populations ultimately affects the resilience, 

adaptability, and sustainability of ecological structure and function by reducing the diversity of 

genetic material to draw upon to meet naturally dynamic and/or human altered circumstances.

 B. Recreation and Fish and Game 

Small streams and wetlands enhance opportunities for outdoor recreation such as fishing, 

swimming, hunting, boating, and wildlife viewing. They also protect multi-billion dollar fishing, 

shellfishing, and tourism industries. The money spent on outdoor water-related recreation like 

waterfowl hunting, fishing and boating supports major manufacturers, retailers, and small 

businesses in communities across the country, as well as generating state and local tax revenues. 

Provisioning for recreation and fish and game supplies supports several large revenue streams. 

Freshwater anglers spent $26.3 billion in 2006 on equipment, travel, licenses, guide fees, bait, 

and other fishing-related expenditures.25 More than 2.3 million Americans age 16 or older 

 

24 TTEB (2010) The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature: A 

synthesis of the approach. conclusions, and recommendations of TEEB. 25 2006 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation 
31 

hunted migratory birds last year, spending about $1.3 billion on their trips and equipment, 

supporting many private sector jobs in the process.26 

Fishing is an American pastime and a business that directly depends on good water 

quality. Salmon, for example, are the third largest commercial catch (by weight) in the U.S., and 

they reproduce in small streams, including many that do not flow year-round. Small and 

intermittent streams are precisely those whose jurisdictional status is most likely to be clarified 

by this guidance. .The 40 million U.S anglers spend $45 billion annually to fish all kinds of 

waters. The commercial salmon fishery is valued at $381 million annually. 

 Expenditures for hunting and fishing have a ripple effect on the economy. For example, 

a 2006 estimate of the economic impacts of waterfowl hunting (ducks and geese) indicated that 

total annual expenditures of $900 million result in a total economic activity of over $2.3 

billion.27 This is a result of what economists refer to as the “multiplier effect”. In addition, the 

same study estimates that waterfowl hunting creates over 27,000 jobs, annual employment 

income of over $800 million and annual state and federal tax revenue of almost $250 million. 

Over 50 percent of the nation’s ducks are born in the prairie potholes region of the 

northern Great Plains. However, about two-thirds of the prairie potholes have already been 

mined, drained, plowed under, or built on. One study found that, because of these kinds of 

impacts, a Midwestern pothole area once supporting about two million breeding pairs now 

supports less than ten percent of that number. While many prairie potholes are isolated from 

navigable waters, and thus not likely to be affected by this guidance, some may be deemed 

“proximate” and thus jurisdictional if they have a significant nexus to navigable waters. 

The values reported above are related to products and services that are affected by water 

quality. A specific valuation would estimate how changes in water quality that might result 

would shift demand curves for these products and services. Thus, the total figures reported 

above are not benefit values directly attributable to the proposed guidance. However, it is likely 

that some incremental portion of those amounts would be associated with the expected 

incremental increases in waters determined to be jurisdictional as a result of using the proposed 

guidance. 

C. Water Supply (Drinking, Irrigation, Industrial) 

Headwater streams and wetlands play a crucial role in providing a continual flow to 

downstream freshwater systems, as well as recharge of groundwater systems. Alteration of small 

streams and wetlands disrupts the quantity and availability of fresh water. One of the intended 

outcomes of the proposed guidance is to help provide clean, safe water for public water supply as 

well as manufacturing, irrigated agriculture, and other business sectors that use water. In the 

continental United States, about 117 million people, over one third of the total U.S. population, 

get some or all of their drinking water from lakes and rivers that rely at least in part on 

intermittent, ephemeral, or headwater streams.28 In the continental U.S., 357,404 total miles of 

 

26 2006 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation 

27 2006 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation 

28 http://water.epa.gov/lawsregs/guidance/wetlands/surface_drinking_water_index.cfm 
32 

streams contribute water to lakes and rivers that supply public drinking water systems. Of that 

total, 58% (207,476 miles) are intermittent, ephemeral, or headwater streams. Application of the 

guidance and including more waters under CWA jurisdiction helps protect the supply and 

prevent contamination of drinking water for these 117 million Americans. Figure 2 shows the 

areas of the country where drinking water supply is most dependent on these types of stream 

systems. 

Figure C-1: Illustration of Contribution of Seasonal and Headwater Streams to Water 

Supply 

Areas Dependent on Seasonal or Headwater

Streams for Drinking Water  

(darkest orange are counties most dependent)

 D. Water Regulation and Purification 

Headwater streams, headwater wetlands, and other seemingly isolated wetlands 

significantly influence water quality of downstream aquatic ecosystems. As depicted in Figure 

3, these small streams and wetlands filter and cleanse water that pass through them and function 

as the site of a large number of physical, chemical, and biological processes and transformations. 

One commonly cited feature of wetlands is their ability to improve water quality by acting as 
33 

sediment sinks. Wetlands are particularly effective at trapping sediments in slow moving water, 

as the wetland vegetation slows water velocity and particles settle out. Processes in headwaters 

largely establish the physical and chemical composition of natural streams. Among the many 

important water-quality related processes in small streams and wetlands are water chemistry 

regulation, nutrient cycling, solute retention, organic matter (OM) production, OM processing, 

and pollutant assimilation. Each of these processes have an influence on downstream water 

quality, organic matter content, nutrient levels, and productivity. The services these processes 

provide can reduce the cost of dredging and water treatment, decrease human health risks, and 

promote healthy fish and wildlife populations in lakes and rivers. These are closely related to the 

supporting services related to nutrient cycling/storage and sustained productivity of downstream 

waters. 

Figure C-2: General Hydrology and Function of a Typical Inland Wetland29

 A related service provided by wetlands is carbon sequestration and its effect on climate 

control. There is much ongoing research to investigate natural and artificial means of removing 

carbon from the atmosphere and maintaining it in the land and water. Based on their potential 

for primary production to exceed respiration, wetlands can naturally sequester carbon. The 

massive peat bogs in the northern U.S. and Canada are evidence of this service on a significant 

scale. Filling, clearing, and draining wetlands releases carbon dioxide to the atmosphere. 

 

29 Image appears in many locations on the internet (such as http://microbewiki.kenyon.edu/index.php/Wetlands) 

without clear attribution of original source. 
34 

E. Floodplain Protection 

Small streams and wetlands mitigate the downstream impacts of floods through the 

retention of surface water. Wetlands hold excess runoff after a storm and then slowly release it 

into receiving waters or groundwater. These systems do not prevent all flooding, but they do 

lower flood peaks. It is generally the higher flood peaks that cause the most significant damage. 

Flooding damages crops, roads, and property. Small streams and adjacent wetlands act as 

sponges, soaking up rainfall and snowmelt. They help prevent flooding downstream, especially 

after small and medium-sized storms. For example, prairie potholes and other isolated wetlands 

hold onto water during and after intense rains, so not all of the water ends up in major rivers at 

the same time. Flooding very often is an interstate issue. Destruction of small streams and 

prairie potholes in one state may lead to flooding in another. Floods lead to significant crop and 

property damage across the United States each year. For example, the great Midwest flood of 

1993 (see Figure 4) caused nearly $20 billion of economic damage, damaging or destroying 

more than 50,000 homes and leaving at least 38 people dead.30 Some increment of economic 

damage such as this may be attributable to loss of small streams and wetlands. While it is 

unlikely that floods of this magnitude would be eliminated by greater preservation of headwater 

streams and wetlands, protecting these kinds of waters would help to mitigate such flooding, and 

perhaps eliminate smaller floods altogether. 

Figure C-3: Image of Midwest Flooding31

The importance of floodplain protection magnifies when considering the likely future 

demand for land development. For example, an examination of future U.S. housing trends helps 

illustrate development pressure and reveals enormous potential consequences. Projections of 

growth in U.S. households from 2000 to 2025, along with allowances for demolition and 

conversion, point to new construction needs for almost 60 million housing units (compared to 

approximately 45 million built between 1980 and 2005). When considering associated 

commercial and industrial facilities, the authors of these studies project that “over half of all 

 

30 Fitzpatrick, Tony. “Geologist decries floodplain development: lessons unlearned from 1993 flood”. Washington 

University in St Louis Newsroom. April 1, 2008. 

31 http://water.usgs.gov/nwsum/WSP2425/functions.html 
35 

development on the ground in 2025 will not have existed in 2000”.32 Even with the economic 

downturn subsequent to this study, this demand will eventually manifest itself in some manner. 

Based on preferences and prices, the authors also report an expected complete reversal of trends 

that had been toward expansion into less dense suburbs and exurbs rather than urban centers. 

This potentially offers an unparalleled opportunity for spatial reconfiguration. Clarifying CWA 

jurisdiction and thus providing Section 404 protection to small streams and wetlands that may be 

candidates for dredge and fill, along with enlightened planning of development within the 

floodplain itself, will be important to avoid and/or mitigate future losses from flooding. Stronger 

protection for small streams and wetlands can help direct growth to locations more beneficial to 

society (e.g., away from floodplains, in areas with existing infrastructure). Figure 5 depicts a 

variety of ecosystem services protected by maintaining natural functions within in a floodplain. 

Figure C-4: Illustration of Floodplain Protection 

 F. Shoreline Stabilization and Erosion Regulation 

Wetlands at the margins of lakes, rivers, bays, and the ocean protect shorelines and 

stream banks against erosion.33 Wetland plants hold the soil in place with their roots, absorb the 

energy of waves, and break up the flow of stream or river currents. When small streams and 

wetlands are lost or altered in ways that diminish their retention ability, the resulting increased 

flows can erode adjacent land and de-stabilize shorelines. The erosion can send excess sediment 

downstream where increased dredging costs and habitat loss may result. In addition, property 

loss and diminished land value cannot be overlooked, and represents a large potential avoided 

cost. 

 

32 Reported in Pitkin and Myers (2008). U.S Housing Trends: Generational Changes and the Outlook to 2050. 

33 Note that the proposed guidance should not affect determinations regarding tidal wetlands, which should already 

be considered jurisdictional in the baseline. 
36 

 G. Groundwater Recharge/Water Cycling 

 Aquifers and groundwater are “re-charged” or replenished with water from precipitation 

and surface flow that seeps into the ground. Wetlands connected to groundwater systems or 

aquifers are important areas for groundwater exchange because they provide time for the 

infiltration or seepage to occur. Groundwater provides water supply for drinking and irrigation 

and helps maintain streamflow and lake and reservoir levels. 

Waters that appear geographically isolated on the surface may be connected to other 

aquatic ecosystems through groundwater flows and intermittently through surface water flow. 

Nearly all freshwater surface water features (streams, lakes, and wetlands) interact with 

groundwater throughout a watershed – and even across surface watershed boundaries. 

Groundwater moves underground from areas of recharge to areas of discharge, often providing 

connections to surface water features. Likewise, surface waters are often integral parts of 

groundwater systems, providing important recharge, purification, and maintenance of aquifer 

depths and levels. The role of wetlands in recharging groundwater varies widely, but can be 

significant. 

H. Sustained Productivity of Downstream Waters 

Small streams and wetlands contribute significantly to the productivity of stream 

ecosystem food webs by providing energy resources (e.g., organic matter) to downstream 

ecosystems. In addition, small streams and wetlands provide sediment and large woody debris to 

downstream channels during infrequent, but necessary high flow events. Under more typical 

conditions, these systems trap and retain sediment, essentially filtering sediment rather than 

flushing it downstream. In a similar manner, these systems will filter pollutants, such as heavy 

metals and organic compounds, and prevent excess nitrogen and phosphorus from being 

delivered downstream on a regular basis. The timing and amount of delivery of sediment and 

nutrients to downstream waters is crucial to their well being. Either too much or too little at the 

wrong time is a problem. Too little and downstream waters cannot sustain productivity because 

of lack of provisions from upstream sources. Too much and habitat gets smothered, waters get 

choked, and algal boom and bust cycles deplete dissolved oxygen levels in water and disrupt the 

balance of natural flora and fauna. These problems may arise when connectivity between small 

streams and wetlands and other waters goes unrecognized and is lost, or when modifications of 

the landscape alters peak velocity and overall flow levels. 

 
37 

APPENDIX D: Literature Review of Benefits Quantification 

EPA’s Guidelines for Preparing Economic Analyses (2011) suggest adopting an effectby-effect approach to benefit estimation, identifying the specific effects of policy options and 

evaluating each in turn.34 The first step to implement this approach for the proposed guidance is 

to identify the most significant categories of effects. Waters affected by the proposed guidance 

may confer a number of benefits to society, among them: 

• Recharging groundwater 

• Purifying water by trapping and neutralizing pollutants (including excessive nutrients) 

• Enhancing the propagation of species that may be important in recreation and assuring 

the survival of species whose continued existence may be valued for ethical or aesthetic 

reasons 

• Mitigating impacts of storms and flooding 

The benefits provided by jurisdictional waters depend crucially on the context in which 

they are placed. This is a restatement of the principle that economic value depends on relatively 

scarcity. Things that are available in abundance relative to the demand for them are cheap. 

Things that are rare relative to the demand for them are expensive. Plentiful wetlands may 

provide little value if no nearby population benefits from their services.35 Conversely, a wetland 

near a major city might provide a number of valuable functions in providing water purification, 

storm and flood protection, and recreational amenities. 

The goal of the proposed guidance is to preserve water resources and their associated 

ecological assets in perpetuity. The benefits from doing so will, then, also accrue in perpetuity, 

and must be discounted. The Guidelines also offer guidance for discounting. 

Benefits might be affected by stochastic factors over time and protection of jurisdictional 

waters might also afford insurance against adverse random events. These are important 

considerations in inferring some types of benefits. 

Groundwater recharge 

Wetlands slow the transmission of surface water. Because water is retained in the 

landscape for longer periods, more infiltrates and enters groundwater reservoirs. This 

 

34 The Guidelines also note that in some instances a more overarching or top-down approach to benefit estimation 

might be adopted, as might occur with the application of stated preference methods, where it is often impossible to 

distinguish between the various values survey respondents might be considering in forming their answers. 

35 A conspicuous exception to this observation might appear to be found in the case of an isolated wetland that 

shelters endangered species. This is actually the exception that proves the rule, however: endangered species are, 

by definition scarce. Moreover, the existence value assigned to such species is really the canonical public good: 

something that might be enjoyed by people all over the world. 
38 

groundwater may be a valuable resource, both because it is retained in or near areas that can use 

the water and because it may be left underground until such as time as it is required for use. 

Moreover, the higher is the volume of groundwater retained in an aquifer, the lower are typically 

the costs of extracting it. 

These values have been studies in a developing country by Acharya (2000), and Acharya 

and Barbier (2000, 2002), who relate agricultural production to water availability and 

groundwater availability to wetland preservation, finding that wetlands contribute significant 

value to agriculture. Similar results might arise from comparable studies in the United States. 

As always, values are dependent on context. If water is abundant, the service of groundwater 

recharge would not be very valuable. Conversely, in areas in which water is chronically or 

seasonally scarce, groundwater recharge could be considerably more valuable. Groundwater 

could be important as a type of “insurance policy” against a lack of precipitation and surface 

water. 

Water purification 

 Natural wetlands can purify water by holding it until pollutants settle out, are taken up in 

the growth of vegetation, or biochemically degrade into less damaging forms. A number of 

biological studies have documented the ability of wetlands to perform this service (see, e. g., the 

surveys in Mayer, et al. 2007; Rupprecht, et al. 2009). Economists have attempted to value such 

services. Breaux, Farber, and Day (1995) find that wetlands can be more valuable if preserved to 

remove pollutants than if converted to other uses. In a widely cited study in France PerrotMaître (2006) reported that the Vittel bottled water company found it profitable to compensate 

local farmers for preserving the landscape around its wells. 

 In a recent study of wetlands along the lower Mississippi Jenkins, et al. (2010) estimated 

that the nitrogen retention service provided by wetlands near the river could be valued at as much 

as $500 per acre per year. While some of the areas considered in the Jenkins, et al., study might 

be comparable to areas that could become jurisdictional under the proposed guidance, the results 

of the study should be interpreted with some caution for two reasons. First, the values derived in 

the study are based on prices that would obtain under pollution control markets that do not 

presently exist. Jenkins, et al. extrapolate from an earlier study by Ribaudo, Heimlich, and 

Peters (2005) that simulated prices in a hypothetical permit market for nitrogen loading in the 

Gulf of Mexico. Such prices would only arise if the market were, in fact, created. Second, as is 

often the case with a number of the services generated be wetlands, different areas – in some 

instances, even relative nearby areas – may generated radically different values depending on 

land use, topography, etc. Estimates of denitrification rates differ by three orders of magnitude 

(a factor of 1,000) between areas. 

 

A closely related literature considers the use of retained natural areas in cost-effective 

pollution control programs. A celebrated case is found in New York City’s efforts to assure the 

retention of drinking water quality in its Catskills watershed reservoir by enacting land use 

restrictions (Chichilnisky and Heal 1998). Ribaudo, et al. (2001) use a large simulation model of 

Midwestern agriculture and land use to show that retaining natural wetlands may be less 
expensive than reducing the use of inputs in controlling the delivery of the nutrients to the “dead 

zone” at the mouth of the Mississippi River. Mitsch and Gosselink (2001) report a number of 

studies that find that the optimal area of wetlands to preserve in various nations of the world 

would be something between current areas and the historic extent of wetlands in the area. 

Similarly, comparisons of alternative measures for nutrient loading reductions to the 

Chesapeake Bay suggest that recently announced TMDL targets might be most cost-effectively 

met by preserving wetlands in combination with other measures (Jones, et al. 2010; Simpson in 

press). The studies cited in this paragraph fall somewhat short of full valuation exercises in that 

they document the ability of preserved natural systems to meet regulatory requirements at lower 

costs than alternatives. However, one may reasonable surmise either that such regulatory 

requirements are set so as to achieve benefits that justify the costs of their imposition, or that, 

however they are set, they must be met and hence that the opportunity cost savings of not having 

to implement more costly measures represents an incremental social benefit. 

Of course, the benefits of water purification arise only when 1) there are pollutants that 

must be removed from the water; and 2) such pollutants would impose costs on society if they 

are not removed. Such circumstances do not necessarily obtain for all waters and all locations 

(Sagoff 2002; Plummer 2009; Simpson 2010). It would, then, be improper to extrapolate water 

purification values universally. By the same token, however, there are certainly instances in 

which such services could be extremely valuable. 

Wildlife habitat 

 Natural wetlands, small streams, and isolated water bodies are very important in the 

reproduction and life cycles of many organisms. These plants and animals may be economically 

valuable for several reasons. First, some, such as the various species of Pacific Salmon, are 

caught and sold commercially. Second, others are important in recreation, either for 

consumption in hunting and fishing, or for nonconsumptive enjoyment, as in birdwatching or 

tourism. Finally, many people attach a nonuse, or existence value to species on the basis of their 

perceived ethical obligation to preserve other species. 

 An extensive literature in economics has attempted to estimate the value of natural 

habitat in the provision of commercially or recreationally important species. In some instances 

reported values are relatively modest. In an early study Lynne, Conroy, and Prochaska (1981) 

found that coastal marshes on the Gulf Coast of Florida only contributed about $ 0.30 per acre in 

terms of the value of enhanced blue crab production. Even adjusting for the considerable 

inflation of the last 30 years, this would not be a large number. Similarly, while Jenkins et al. 

(2010) found relatively high values for the nutrient reduction services of wetlands near the 

Mississippi, the estimated the value of increased waterfowl hunting was considerably lower, at 

about $6.50 per acre per year. An exception to these somewhat low estimates is found in Bell 

(1997), who estimates values of approximately $6500 per acre for coastal wetlands supporting 

recreational fisheries (coastal wetlands should not be affected by the proposed guidance as they 

should be jurisdictional under the current guidance). 

39 
40 

 In each of these studies the researchers apply a similar method for estimating the value of 

environmental improvement to fisheries or other wildlife-based commercial activities.36 A 

schematic overview of that procedure is as follows. Fish and other living resources have a 

natural reproductive process. Economically optimal management of the population involves a 

tradeoff between catching more fish now and leaving enough fish as to assure a thriving 

population later (see, e. g., Clark 1990). The rate at which population grows typically depends 

on the size of the population, a species-specific biological parameter that measures the inherent 

fecundity of the animal, and the carrying capacity of the environment – a biophysical limit on the 

population that can be sustained. Environmental conditions affect carrying capacity. In this case 

the extent of jurisdictional waters will determine the populations of fish, waterfowl, and other 

organisms that can be sustained, and the harvests that will then be allowed. As in all exercises in 

economic valuation, context is crucial. When habitat, and, by extension, target species 

populations are abundant relative to the demand for them, values will not be greater. 

Conversely, as land and animals get scarce, their values increase. 

Factors other than just the biological parameters can affect the estimation of wildlife 

harvesting benefits. One is the institutional context. When wildlife are subject to open access 

competition between would-be harvesters may dissipate any benefits regardless of environmental 

circumstances (Freeman 1991). However, fisheries are increasingly coming under more rational 

management (Costello 2008). Over and above the benefits with respect to the maintenance of 

the target species and the long-term satisfaction of consumer preferences, such improved 

management may also mean that preserving natural habitats may be more valuable. 

Another consideration is that much of the harvesting of natural resources occurs outside 

of the formal market economy. Recreational or subsistence hunting and fishing may also be 

important activities. Benefit estimates analogous to those for commercial harvesting may also be 

derived by substituting nonmarket valuation estimates of willingness to pay to hunt and fish for 

market prices. For example, Massey, Newbold, and Gentner 2008 estimate the relationship 

between water quality, fish population, and angler trip demand and show that anglers have a 

positive willingness to pay for improvements in water quality. This result is common in the 

literature. Other examples are provided in the literature reviews and meta-analysis conducted by 

Van Houtven, Powers, and Pattanayak 2007 and Freeman (1995). 

Existence and bequest values, which are often grouped together as non-use values, may 

also arise when natural wetlands, small streams, and isolated water bodies are either rare or 

unique in their own right or if they provide habitat and shelter to rare and endangered species. In 

this situation, existence values are the amount an individual would be willing to pay to ensure 

that a native species exists in its native habitat. Bequest value is the amount an individual would 

be willing to pay to preserve a species or its habitat for future generations. As stated earlier the 

magnitude of existence or bequest values is closely tied to the scarcity of the resources. Because 

estimation requires using stated preference methods, non-use values are generally more difficult 

and uncertain to estimate than use values. This difficulty and uncertainty has not prevented 

multiple studies from appearing in the literature. A number of wetland use and non-use 

valuation studes are reviewed and included in a meta-analysis by Brouwer et al. (1999). They 

 

36 There are also other studies in which less conceptually defensible approaches are taken. See, e. g., Lynne, 

Conroy, and Prochaska (1981). 
estimate that non-use values are roughly half the magnitude of use values. Loomis and White 

(1996) conduct a similar review of the literature and meta-analysis on the economic benefits of 

rare and endangered species. They find significant WTP values across species, and not 

surprisingly, over half of the variation in those estimates can be explained by the species 

population levels. 

 Mitigation and Prevention of Flooding 

 Another service provided by natural wetlands is the mitigation and prevention of floods. 

Resultant downstream damages can be extreme. The Midwest flooding of 1993 caused nearly 

$20 billion of economic damage, damaged or destroyed more than 50,000 homes and left at least 

38 people dead (Fitzpatrick 2008). 

 Again, however, the economically relevant concern is not the total damages from 

flooding, but rather the incremental damages that could be avoided by preserving more waters. 

Consideration of extreme cases underscores the point of incremental analysis. If weather is 

favorable and precipitation is moderate there would be no flooding, and hence no flood 

protection service. Conversely, if weather is so extreme that precipitation would overwhelm all 

natural or man-made flood-control measures anyway, preserving wetlands for flood control 

might make little difference to the extent of damages. 

 It can be helpful to think of the flood control services of natural wetlands as a form of 

insurance policy. As such, their value is determined by the interaction of three factors: the level 

of damages that would occur without the wetlands in place; the probability that such damage will 

occur without the wetlands in place; and the incremental effect of the wetlands in reducing that 

probability. Wetlands will be most valuable for the flood protection services they provide if they 

significantly reduce the likelihood that flood waters would otherwise reach levels at which 

damages are greatest. For example, Hey and Philippi (1995) estimate that if wetland acres in the 

Mississippi Basin had been roughly doubled, to about seven percent of the total land area, the 

floods of 1993 would have been avoided. Even if increased to this level, the area in wetlands 

would still represent only about 70% of their extent before European settlement 

41 
42 

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Acharya, G. and E.B. Barbier. 20

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groundwater recharge in the Had

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02. Using dom

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arine 

recreational fishing in the southeastern United States. Ecological Economics 21 (3). 243 – 254. 

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Chichilnisky, G., and G. Heal. 1998. Economic returns from the biosphere. Nature 391. 629 – 

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